Electro-optical products maker Gentex Corp. (GNTX: Quote) Tuesday reported a six percent rise in second quarter profit as strong mirror shipments led to double-digit sales growth, partly offset by lower gross margin. Nonetheless, both earnings and sales for the quarter missed Street estimates.
Moving forward, Gentex estimates sales for the third quarter to be in the range of flat to an increase of five percent over last year. It also expressed caution over pricing pressures and customer order volatility.
Following the news, Gentex shares lost the most in a year, with the stock down 28 percent at $15.19 on the Nasdaq.
Gentex makes automatic-dimming rearview mirrors and camera-based lighting and driver-assist systems. The company has cautioned that four customers are changing their primary Rear Camera Display or RCD location from the mirror to a radio display location. As a result, two of the customer changes is to materially impact RCD mirror unit shipments negatively in the 2013 calendar year, while the impact from other two customers will be felt in calendar year 2014.
Gentex also said that RCD mirror shipments will be about flat for calendar year 2012 compared to 2011, partly due to delay in implementation of the Kids Transportation Safety Act that mandates new vehicles in the U.S. to be fitted with cameras and RCDs by September 2014.
Zeeland, Michigan-based Gentex reported second quarter net income of $40.8 million or $0.28 per share, compared to $38.5 million or $0.27 per share last year. On average, 10 analysts polled by Thomson Reuters expected earnings of $0.29 per share for the quarter. Analysts' estimates typically exclude special items.
Sales for the quarter were $280 million, up 15 percent from $243 million last year. Analysts expected sales of $280.55 million.
Total auto-dimming mirror unit shipments for the quarter improved 19 percent from last year to about 6.04 million units.
But the topline growth was partly offset by a decline in gross margin to 33.1 percent from 35.2 percent last year, hurt by customer price reductions and product mix.
GNTX is trading at $15.19, down $5.96 or 28.18%, on a volume or million shares on the Nasdaq.
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by RTT Staff Writer
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