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Why Is Superior Industries International, Inc. (SUP) Up 14.68% Since Its Last Earnings Report?

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It has been about a month since the last earnings report for Superior Industries International, Inc. (SUP - Free Report) . Shares have added about 14.7% in that time frame.

Will the recent positive trend continue leading up to its next earnings release, or is SUP due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Superior Industries' Q1 Earnings and Revenues Beat

Superior Industries’ adjusted earnings of 15 cents per share for first-quarter 2018 topped the Zacks Consensus Estimate of 4 cents. Including the impact of acquisition-related items, net income was $10.3 million or 7 cents per share.

Revenues were $386.4 million in the reported quarter, beating the Zacks Consensus Estimate of $356.2 million. Also, the reported figure was higher than $174.2 million recorded in the year-ago quarter.

During the quarter under review, the company reported record wheel-unit shipments of 5.5 million compared with 2.8 million in the prior-year quarter. The rise is primarily due to the addition of its European operations and higher unit shipments in North America. Value-added sales, i.e. net sales minus pass-through charges for aluminum, increased to $207.4 million compared with $95.5 million in first-quarter 2017.

Gross profit rose to $50 million from $19.2 million in the year-ago quarter. The increase was due to strong sales performance, enhanced operational efficiency in North America and the addition of European operations.

Selling, general and administrative expenses jumped to $22.4 million in first-quarter 2018 from $15.3 million in the prior-year quarter, resulting mainly due to the addition of Superior’s European operations.

Financial Details

In first-quarter 2018, Superior Industries’ net cash, provided by the operating activities, was $14.4 million compared with $1.6 million net cash used in the year-ago period.

Outlook

For 2018, Superior Industries reaffirmed its net sales, value-added sales, adjusted EBITDA, capital expenditures and working capital provided on Jan 17, 2018.

The company expects net sales for 2018 to be $1.45-$1.5 billion, driven by 21.25-21.6 million units of shipment. Superior Industries expects value-added sales of $800-$835 million. Adjusted EBITDA is expected to be $185-$200 million. The company projects capital expenditure to be around $95 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.

VGM Scores

At this time, SUP has a subpar Growth Score of D, though it is lagging a bit on the momentum front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

The company's stock is suitable solely for value based on our styles scores.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of this revision indicates a downward shift. Notably, SUP has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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