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Superior Industries (SUP) Beats on Q2 Earnings & Revenues

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Shares of Superior Industries International, Inc. (SUP - Free Report) have gained 13.3% in a day’s trading, following the second-quarter 2018 earnings release. In the quarter under review, the company’s adjusted earnings of 25 cents per share beat the Zacks Consensus Estimate of 7 cents. Including the impact of acquisition-related items, net income was $8.1 million or 9 cents per share.

Net Sales were $389 million in the reported quarter, beating the Zacks Consensus Estimate of $383.5 million. Further, the reported figure was higher than $240.6 million recorded in the year-ago quarter.

During the quarter under review, the company reported record wheel unit shipments of 5.6 million compared with 3.8 million in the prior-year quarter. The rise is primarily due to the addition of two months of European operations, which added 1.7 million units of shipment. Value-added sales, i.e. net sales minus pass-through charges for aluminum, increased to $204.4 million compared with $130.4 million in second-quarter 2017.

Superior Industries International, Inc. Price, Consensus and EPS Surprise

 

Gross profit rose to $53.6 million from $20.1 million in the year-ago quarter. The increase was due to enhanced operational efficiency in North America and the addition of two months of the European operations.

Selling, general and administrative expenses jumped to $22.3 million in second-quarter 2018 from $22.1 million in the prior-year quarter.

Financial Details

In second-quarter 2018, Superior Industries’ net cash, provided by the operating activities, was $16.4 million compared with $8.5 million used in the year-ago period. Capital expenditure was $15.3 million compared with $13.2 million recorded in the prior-year quarter.

Outlook

For 2018, Superior Industries revised its guidance of net sales, adjusted EBITDA and effective tax rate. The revised figures are based on the company’s first-half performance of 2018.

For 2018, the company expects net sales of $1.52-$1.56 billion compared with the prior expectation of $1.45-$1.5 billion. Adjusted EBITDA is expected to be $190-$205 million from the prior guidance of $185-$200 million. Moreover, the effective tax rate is now anticipated to be 25-29% compared with the previous outlook of 10-15%.

However, the company reaffirmed its value-added sales of $800-$835 million. Furthermore, the capital expenditure projection of around $95 million has been kept unchanged.

Zacks Rank & Key Picks

Superior Industries currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Fox Factory Holding Corporation (FOXF - Free Report) , Allison Transmission Holdings, Inc. (ALSN - Free Report) and Honda Motor Co., Ltd. (HMC - Free Report) . Fox Factory and Allison Transmission sport a Zacks Rank #1 (Strong Buy) while Honda carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission has an expected long-term growth rate of 10%. Over a year, shares of the company have gained 26.6%.

Fox Factory has an expected long-term growth rate of 16.8%. Shares of the company have risen 67.2% in the past year.

Honda has an expected long-term growth rate of 3%. Over a year, shares of the company have gained 11.4%.

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