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Why Is Superior Industries (SUP) Down 17.2% 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 lost about 17.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Superior Industries due for a breakout? 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 Q1 Earnings & Revenues Lag Estimates

Superior Industries reported adjusted loss of 22 cents in first-quarter 2019, wider than the Zacks Consensus Estimate of loss of 15 cents. The company reported adjusted earnings per share of 15 cents in first-quarter 2018.

Net sales were $357.7 million in the reported quarter, missing the Zacks Consensus Estimate of $364 million. The reported figure was lower than $386.4 million recorded in the year-ago quarter. This quarterly decline was due to lower volume, weaker euro and reduced aluminum prices, partly offset by improved product mix.

During the first quarter, the company’s wheel unit shipments declined 9.17% year over year to 5 million. This decline primarily resulted from reduced shipments in North America, with some softness in Europe. Gross profit fell to $33.1 million from $50 million in the year-ago quarter.

Selling, general and administrative expenses contracted to $14.5 million in first-quarter 2019 from $22.4 million a year ago due to reduced integration-related expenses.

Financial Details

At the end of the reported quarter, Superior Industries’ net cash provided by operating activities was $28.7 million compared with $14.4 million in the year-ago period. Capital expenditure totaled $13.4 million, marking a decrease from $22.7 million recorded in the prior-year quarter.

Outlook

The company reiterated its guidance for 2019. It 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.

Over the past month, shares of Superior Industries have underperformed the industry it belongs to. During that period, shares of the company have declined 6.1% against the industry’s growth of 4%.

How Have Estimates Been Moving Since Then?

Fresh estimates followed an upward path over the past two months. The consensus estimate has shifted 18.52% due to these changes.

VGM Scores

Currently, Superior Industries has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, 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 C. 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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