Gentex (GNTX) Q4 Earnings Surpass Estimates, Increase Y/Y
Gentex Corporation’s GNTX fourth-quarter 2023 earnings of 50 cents per share surpassed the Zacks Consensus Estimate of 44 cents and increased 35% from the year-ago quarter.
This Zeeland-based automotive products supplier reported net sales of $589.1 million, beating the Zacks Consensus Estimate of $562 million, increasing 19% from the year-ago period. The company recorded a gross margin of 34.5%, reflecting an increase of 330 basis points from the fourth quarter of 2022, due to higher sales, recurring price increases to customers, cost recoveries, improved leverage on overhead expenses, purchasing cost reductions and improvements in freight and tariff-related costs.
Gentex Corporation Price, Consensus and EPS Surprise
Gentex Corporation price-consensus-eps-surprise-chart | Gentex Corporation Quote
Segmental Performance
The Automotive segment’s net sales — contributing the most to Gentex’s revenues — totaled $578.7 million in the fourth quarter, 19.8% higher than the $482.9 million reported in the year-ago quarter and beating our estimate of $541.9 million. In the reported quarter, auto-dimming mirror shipments in the North American market increased 13% to 3,837,000 units. Shipments rose 12% year over year in the international markets to 8,519,000 units. Total shipments increased 12% to 12,357,000 units.
Other net sales, which include dimmable aircraft windows and fire protection products, decreased from the year-ago quarter’s $10.7 million to $10.5 million and missed our estimate of $10.9 million. Fire protection sales decreased 44% from the year-ago quarter. Dimmable aircraft window sales increased 362% year over year.
Financial Tidbits
Total operating expenses rose 18% year over year to $70.6 million in fourth-quarter 2023. Engineering and R&D expenses increased to $41.5 million from $34.9 million. SG&A expenses rose to $29.1 million from $24.8 million recorded in the corresponding quarter of 2022.
GNTX paid a dividend of 12 cents per share in the quarter. It repurchased 2.2 million shares of its common stock at an average price of $30.76 per share. As of Dec 31, 2023, the company had nearly 15.9 million shares remaining for buyback per its previously announced share repurchase plan. Gentex had cash and cash equivalents of about $226.4 million as of Dec 31, 2023.
2024 Guidance
Its 2024 net sales are estimated in the range of $2.45-$2.55 billion. The gross margin is projected in the band of 34-35%. Capital expenditure is anticipated within $225-$250 million. Operating expenses are estimated in the band of $295-$305 million.
Zacks Rank & Other Key Picks
GNTX currently carries a Zacks Rank #2 (Buy).
Some other top-ranked players in the auto space are Honda Motor Co., Ltd. HMC, BYD Company Limited BYDDY and Mercedes-Benz Group AG MBGAF. HMC and BYDDY sport a Zacks Rank #1 (Strong Buy) each and MBGAF carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for HMC’s 2024 sales and earnings implies year-over-year growth of 14.8% and 37.3%, respectively. The EPS estimates for 2024 and 2025 have moved up 7 cents and 3 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for BYDDY’s 2023 sales and earnings suggests year-over-year growth of 36.5% and 70.6%, respectively. The EPS estimate for 2024 has improved 30 cents in the past seven days.
The Zacks Consensus Estimate for MBGAF’s 2023 sales suggests year-over-year growth of 5.8%. The EPS estimates for 2023 and 2024 have improved by a penny and 30 cents, respectively, in the past 60 days.
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