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Gentex Q3 Earnings Surpass Expectations, Guidance Revised

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Gentex Corporation’s (GNTX - Free Report) third-quarter 2024 earnings per share (EPS) of 53 cents beat the Zacks Consensus Estimate of 50 cents and increased 18% year over year.

This Zeeland-based automotive products supplier reported net sales of $609 million, which missed the Zacks Consensus Estimate of $611 million but rose 6% from the year-ago period. The company recorded a gross margin of 33.5%, reflecting a rise of 30 basis points from the third quarter of 2023 due to higher sales and reduced purchasing costs.

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Gentex Corporation Price, Consensus and EPS Surprise

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 — contributing the most to Gentex’s revenues — totaled $596.5 million in the third quarter, which was 5.7% higher than the $564.5 million reported in the year-ago quarter but missed our estimate of $614.4 million. In the reported quarter, auto-dimming mirror shipments in the North American market decreased 4% to 3,823,000 units. Shipments fell 3% year over year in the international markets to 8,399,000 units. Total shipments declined 3% to 12,221,000 units.

Other net sales, which include dimmable aircraft windows and fire protection products, increased from the year-ago quarter’s $11.3 million to $12 million but lagged our estimate of $12.4 million. Fire protection sales increased $1.8 million from the year-ago quarter’s figure. Dimmable aircraft window sales decreased $1.9 million from the year-ago quarter’s level.

Financial Tidbits

Total operating expenses rose 13.5% year over year to $78.3 million in third-quarter 2024. Engineering and R&D expenses increased to $48.2 million from $40.2 million. SG&A expenses rose to $30.1 million from $28.8 million recorded in the corresponding quarter of 2023.

GNTX paid a dividend of 12 cents per share in the quarter. It repurchased 3.2 million shares of its common stock at an average price of $30.16 per share. As of Sept. 30, 2024, the company had nearly 10.1 million shares remaining for buyback, per its previously announced share repurchase plan. Gentex had cash and cash equivalents of about $179.6 million as of Sept. 30, 2024.

GNTX Revises 2024 Guidance

Gentex now expects 2024 net sales in the range of $2.35-$2.40 billion, down from the previous estimate of $2.40-$2.50 billion. The gross margin is projected in the band of 33.5-34%, down from the previous guidance of 34-34.5%. Capital expenditure is anticipated between $150 million and $175 million, down from the previous outlook of $175-$200 million. Operating expenses are estimated in the band of $295-$305 million.

Zacks Rank & Key Picks

GNTX currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the auto space are Yamaha Motor Co., Ltd. , BYD Company Limited (BYDDY - Free Report) and Suzuki Motor Corporation (SZKMY - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for YAMHF’s 2024 sales and earnings suggests year-over-year growth of 6.62% and 8.55%, respectively. EPS estimates for 2024 and 2025 have improved 14 cents and 18 cents, respectively, in the past 60 days.

The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 21.88% and 19.52%, respectively. EPS estimates for 2024 and 2025 have improved by 7 cents and 13 cents, respectively, in the past 30 days.

The Zacks Consensus Estimate for SZKMY’s fiscal 2025 sales and earnings suggests year-over-year growth of 7.36% and 22.51%, respectively. EPS estimates for fiscal 2025 and 2026 have improved by 78 cents and 99 cents, respectively, in the past 60 days.


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