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Superior Industries (SUP) Up 8.6% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Superior Industries (SUP - Free Report) . Shares have added about 8.6% 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’ Q2 Earnings Top Estimates, Revenues Lag

Superior Industries International, Inc. reported adjusted loss of 6 cents in second-quarter 2019, narrower than the Zacks Consensus Estimate of loss of 7 cents.

Net sales were $352.5 million in the reported quarter, missing the Zacks Consensus Estimate of $364 million. The reported figure was lower than $389 million recorded in the year-ago quarter. This quarterly decline was due to lower volume and weaker Euro, which were partly offset by improved product mix.

During the second quarter, the company’s wheel unit shipments declined 11.9% year over year to 4.9 million. This decline primarily resulted from softer industry production levels, reduced take rates and share in North America, and lower aftermarket volume in Europe. Gross profit fell to $40 million from $53.6 million in the year-ago quarter.

Selling, general and administrative expenses contracted to $16 million (4.5% of net sales) in second-quarter 2019 from $22.3 million a year ago due to reduced acquisition and integration-related expenses.

Financial Details

At the end of the reported quarter, Superior Industries’ net cash provided by operating activities was $40.9 million compared with $16.4 million in the year-ago period. Capital expenditure totaled $15.3 million, unchanged from the figure recorded in the prior-year quarter.

Outlook

Superior Industries reiterated its guidance for 2019. The company projects unit shipments of 19.5-19.9 million, which are likely to drive net sales to $1.39-$1.44 billion. Value-added sales are projected to be $755-$795 million. Adjusted EBITDA is expected to be $165-$180 million. Further, capital expenditure is projected to be around $75 million while cash flow from operation is expected to be $125-$145 million.
 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted -20.37% due to these changes.

VGM Scores

Currently, Superior Industries has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. 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

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, 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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