We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Gentex Corporation (GNTX - Free Report) reported third-quarter 2022 earnings of 31 cents per share, which lagged the Zacks Consensus Estimate of 39 cents and declined 3.1% from 32 cents recorded in the year-ago quarter. Lower-than-expected auto-dimming mirror shipments in North American market and sales from the automotive segment resulted in the underperformance.
The Zeeland-based automotive products supplier reported net sales of $493.6 million, falling short of the Zacks Consensus Estimate of $498 million but increasing 24% from the year-ago period. The company recorded a gross margin of 29.8%, lower than the year-ago quarter’s 35.3%, due to increases in raw material and labor costs owing to higher wages and labor inefficiencies, and unfavorable product mix.
Gentex Corporation Price, Consensus and EPS Surprise
The Automotive segment’s net sales — which have the highest contribution to Gentex’s revenues — totaled $480.9 million in the third quarter, 23% higher than $391.3 million reported in the year-ago quarter. Despite this, the figure missed the Zacks Consensus Estimate of $484 million. In the reported quarter, auto-dimming mirror shipments in the North American market increased 16% to 3,758,000 units but lagged the consensus mark of 3,871,000 units. Shipments rose 18% year over year in the international markets to 7,731,000 units and topped the Zacks Consensus Estimate of 7,402,000 units. Total shipments increased 17% to 11,489,000 units, outpacing the consensus mark of 11,274,000 units.
Other net sales, which include dimmable aircraft windows and fire protection products, increased 42% from the year-ago quarter’s $8.3 million to $12.7 million, crossing the consensus metric of $10.38 million. Fire protection sales increased 78%. Dimmable aircraft window sales fell 7% from the third quarter of 2021. Gentex continues to expect that the dimmable aircraft window sales will be hampered until a meaningful recovery of the aerospace industry begins and the Boeing 787 aircraft production levels get a boost.
Financial Tidbits
Total operating expenses rose 15% year over year to $60.4 million in third-quarter 2022 mainly due to staffing, professional fees, increased outbound freight expenses and travel-related expenses. Engineering and R&D expenses increased to $33.5 million from $29.7 million. SG&A expenses jumped to almost $27 million from nearly $23 million recorded in the corresponding quarter of 2021.
Gentex paid dividends of 12 cents per share in the quarter. During the quarter, it repurchased 0.9 million shares of its common stock at an average price of $26 per share for a total sum of $22.3 million. As of Sep 30, 2022, the company had nearly 21.5 million shares remaining for buyback per its previously announced share repurchase plan. Gentex had cash and cash equivalents of nearly $223 million as of Sep 30, 2022, down from $262.3 million as of Dec 31, 2021.
Guidance
Per IHS Markit, third-quarter 2022 light vehicle production (LVP) in North America, Europe, China, Japan and Korea is expected to increase 2.7% year over year to 18.26 million units. Full-year 2022 and 2023 LVP is expected to increase 5% and 4%, respectively, on a year-over-year basis.
Gentex remains concerned about high levels of volatility in customer orders and vehicle production volumes. It expects microchip shortage and supply chain disruptions aggravated by the Russia-Ukraine war to play spoilsport. Labor shortages and a weak economic environment are also concerns. Consequently, the company has modified the sales and margins guidance for 2022.
Gentex’s 2022 net sales are now estimated in the band of $1.90-$1.95 billion from the prior range of $1.87-$1.97 billion. The gross margin is projected in the band of 32-33%, suggesting a decline from the previous forecast of 33-34%. Capital expenditure is now anticipated within $140-$150 million instead of $125-$150 million. Operating expenses are now estimated in the band of $235-$240 million compared with the previous projection of $230-$240 million. For 2023, GNTX continues to expect year-over-year sales growth of 15-20%.
Cummins has an expected earnings growth rate of 18.4% for the current year. The Zacks Consensus Estimate for CMI’s current-year earnings has been revised 1% upward in the past 30 days.
CarParts has an expected earnings growth rate of 45% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant over the past 30 days.
Genuine Parts has an expected earnings growth rate of 18.4% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 1.6% upward over the past 30 days.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Gentex (GNTX) Lags Q3 Earnings Estimates, Revises 2022 View
Gentex Corporation (GNTX - Free Report) reported third-quarter 2022 earnings of 31 cents per share, which lagged the Zacks Consensus Estimate of 39 cents and declined 3.1% from 32 cents recorded in the year-ago quarter. Lower-than-expected auto-dimming mirror shipments in North American market and sales from the automotive segment resulted in the underperformance.
The Zeeland-based automotive products supplier reported net sales of $493.6 million, falling short of the Zacks Consensus Estimate of $498 million but increasing 24% from the year-ago period. The company recorded a gross margin of 29.8%, lower than the year-ago quarter’s 35.3%, due to increases in raw material and labor costs owing to higher wages and labor inefficiencies, and unfavorable product mix.
Gentex Corporation Price, Consensus and EPS Surprise
Gentex Corporation price-consensus-eps-surprise-chart | Gentex Corporation Quote
Segmental Performance
The Automotive segment’s net sales — which have the highest contribution to Gentex’s revenues — totaled $480.9 million in the third quarter, 23% higher than $391.3 million reported in the year-ago quarter. Despite this, the figure missed the Zacks Consensus Estimate of $484 million. In the reported quarter, auto-dimming mirror shipments in the North American market increased 16% to 3,758,000 units but lagged the consensus mark of 3,871,000 units. Shipments rose 18% year over year in the international markets to 7,731,000 units and topped the Zacks Consensus Estimate of 7,402,000 units. Total shipments increased 17% to 11,489,000 units, outpacing the consensus mark of 11,274,000 units.
Other net sales, which include dimmable aircraft windows and fire protection products, increased 42% from the year-ago quarter’s $8.3 million to $12.7 million, crossing the consensus metric of $10.38 million. Fire protection sales increased 78%. Dimmable aircraft window sales fell 7% from the third quarter of 2021. Gentex continues to expect that the dimmable aircraft window sales will be hampered until a meaningful recovery of the aerospace industry begins and the Boeing 787 aircraft production levels get a boost.
Financial Tidbits
Total operating expenses rose 15% year over year to $60.4 million in third-quarter 2022 mainly due to staffing, professional fees, increased outbound freight expenses and travel-related expenses. Engineering and R&D expenses increased to $33.5 million from $29.7 million. SG&A expenses jumped to almost $27 million from nearly $23 million recorded in the corresponding quarter of 2021.
Gentex paid dividends of 12 cents per share in the quarter. During the quarter, it repurchased 0.9 million shares of its common stock at an average price of $26 per share for a total sum of $22.3 million. As of Sep 30, 2022, the company had nearly 21.5 million shares remaining for buyback per its previously announced share repurchase plan. Gentex had cash and cash equivalents of nearly $223 million as of Sep 30, 2022, down from $262.3 million as of Dec 31, 2021.
Guidance
Per IHS Markit, third-quarter 2022 light vehicle production (LVP) in North America, Europe, China, Japan and Korea is expected to increase 2.7% year over year to 18.26 million units. Full-year 2022 and 2023 LVP is expected to increase 5% and 4%, respectively, on a year-over-year basis.
Gentex remains concerned about high levels of volatility in customer orders and vehicle production volumes. It expects microchip shortage and supply chain disruptions aggravated by the Russia-Ukraine war to play spoilsport. Labor shortages and a weak economic environment are also concerns. Consequently, the company has modified the sales and margins guidance for 2022.
Gentex’s 2022 net sales are now estimated in the band of $1.90-$1.95 billion from the prior range of $1.87-$1.97 billion. The gross margin is projected in the band of 32-33%, suggesting a decline from the previous forecast of 33-34%. Capital expenditure is now anticipated within $140-$150 million instead of $125-$150 million. Operating expenses are now estimated in the band of $235-$240 million compared with the previous projection of $230-$240 million. For 2023, GNTX continues to expect year-over-year sales growth of 15-20%.
Zacks Rank & Key Picks
GNTX currently has a Zacks Rank #5 (Strong Sell).
Some better-ranked players in the auto space are Cummins Inc. (CMI - Free Report) , CarParts.com (PRTS - Free Report) and Genuine Parts Company (GPC - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Cummins has an expected earnings growth rate of 18.4% for the current year. The Zacks Consensus Estimate for CMI’s current-year earnings has been revised 1% upward in the past 30 days.
CarParts has an expected earnings growth rate of 45% for the current year. The Zacks Consensus Estimate for current-year earnings has remained constant over the past 30 days.
Genuine Parts has an expected earnings growth rate of 18.4% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised 1.6% upward over the past 30 days.