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Gentex (GNTX) Q1 Earnings Beat Estimates, Revenues Rise Y/Y

Zacks Equity Research

Gentex Corporation GNTX delivered second-quarter 2019 earnings per share of 42 cents, which beat the Zacks Consensus Estimate of 40 cents. In the year-ago quarter, the company’s bottom-line figure amounted to 40 cents. Its net income declined to $108.9 million from $109 million in second-quarter 2018.

During the quarter under review, the company delivered net sales of $468.7 million, which beat the Zacks Consensus Estimate of $464 million. Moreover, the top line moved up 3% from the year-ago quarter’s figure of $454.9 million.

Gentex Corporation Price, Consensus and EPS Surprise

 

Gentex Corporation Price, Consensus and EPS Surprise

Gentex Corporation price-consensus-eps-surprise-chart | Gentex Corporation Quote

 

Q2 in Detail

During the reported quarter, the company recorded gross margin of 37.7%, up from the year-ago quarter’s tally of 36.2%. The gross margin was affected by approximately 60 basis points due to impacts of tariffs.

During the quarter, auto-dimming mirror shipments in the North American market rose by 12% to 3.5 million. In the International market, the same declined 2% to 7.2 million. In total, shipments rose 2% year over year to 10.8 million.

Operating expenses during second-quarter 2019 increased 5% to $48.6 million from $46.1 million in second-quarter 2018.

Share Repurchase

During the second quarter, the company repurchased approximately 3.1 million shares of its common stock at an average price of $22.72 per share. As of Jun 30, 2019, Gentex had around 26 million shares remaining for repurchase. The company intends to continue to repurchase additional shares of its common stock in the future to support its capital allocation strategy.

Financials

Gentex had cash and cash equivalents of $260.3 million as of Jun 30, 2019 compared with $217 million as of Dec 31, 2018.

Outlook

The company reiterated its guidance for 2019. It expects revenues in the range of $1.87-$1.90 billion. Gross margin is anticipated in the band of 36.5-37.5% for the current year. Projections for operating expenses remain unchanged at $195-$200 million.

Zacks Rank & Stocks to Consider

Gentex currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the auto space are Copart, Inc CPRT, CarMax, Inc KMX and AutoZone, Inc AZO, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Copart has an expected long-term growth rate of 20%. In the past six months, shares of the company have shot up 57.3%.

CarMax has an expected long-term growth rate of 12.6%. In the past six months, shares of the company have rallied 43.8%.

AutoZone has an expected long-term growth rate of 12.2%. In the past six months, shares of the company have improved 40.5%.

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