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Why Is Superior Industries (SUP) Up 6.2% Since Last Earnings Report?

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A month has gone by since the last earnings report for Superior Industries (SUP - Free Report) . Shares have added about 6.2% in that time frame, outperforming the S&P 500.

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

Superior Industries Q4 Earnings & Revenues Top Estimates

Superior Industries reported adjusted loss of 16 cents in fourth-quarter 2018, narrower than the Zacks Consensus Estimate of loss of 20 cents. Including the benefit of acquisition and one-time items, the company’s earnings were 77 cents per share.

Net sales were $378.8 million in the reported quarter, beating the Zacks Consensus Estimate of $371 million. The reported figure was higher than $361.8 million recorded in the year-ago quarter. The quarterly increase was on the back of rise in aluminum prices, larger diameter wheels and increased shipments for European operations.

During the fourth quarter, the company’s wheel unit shipments declined 3.7% year over year to 5.2 million. The decline was primarily due to reduced volume in North America, partly offset by increased shipments for Europe. Gross profit fell to $36.3 million from $39.7 million in the year-ago quarter.

Selling, general and administrative expenses contracted to $17.1 million (4.5% of net sales) in fourth-quarter 2018 from $25.9 million (7.2% of net sales) a year ago due to reduced acquisition and integration-related expenses.

2018 Results

In 2018, the company posted net income of $26 millionor earnings of 29 cents per share, whereasnet loss was $6.2 million or loss of $1.01 per share in the prior year.

The company’s net sales were $1.5 billion compared with $1.1 billion recorded in 2017.

Financial Details

At the end of the reported quarter, Superior Industries’ net cash provided by operating activities was $91.8 million compared with $46.5 million in the year-ago period. Capital expenditure totaled $22.2 million, marking an increase from $14.1 million recorded in the prior-year quarter.

Outlook

In 2019, Superior Industries projects unit shipments of 19.85-20.30 million, which are likely to drive net sales to $1.42-$1.47 billion.Value-added sales are projected to be $765-$805 million. Adjusted EBITDA is expected to be $170-$185 million. Further, capital expenditure is projected to be around $85 million while cash flow from operation is expected to be $125-$145 million.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates flatlined during the past month. The consensus estimate has shifted -164.29% due to these changes.

VGM Scores

Currently, Superior Industries has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

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

Outlook

Superior Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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