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Gentex's (GNTX) Q1 Earnings & Sales Lag Estimates, Rise Y/Y

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Gentex Corporation GNTX reported first-quarter 2021 earnings of 46 cents per share, missing the Zacks Consensus Estimate of 49 cents due to lower-than-expected other sales. Revenues from other sales came in at $8.1 million, falling short of the Zacks Consensus Estimate of $15.3 million. Nonetheless, the bottom line marked year-over-year growth of 28%.

This Zeeland-based automotive products supplier reported net sales of $483.7 million, marginally lagging the Zacks Consensus Estimate of $489 million. However, the top-line figure increased 7% year over year. The company recorded gross margin of 37.9% for the reported quarter, higher than the year-ago quarter’s 34.5% on higher sales and cost-containment efforts.

Gentex Corporation Price, Consensus and EPS Surprise

Gentex Corporation Price, Consensus and EPS Surprise
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 — which have the highest contribution to Gentex’s revenues — totaled $475.6 million for the first quarter, up 8% year over year, primarily on the back of higher auto dimming mirror shipments. For the quarter under review, auto-dimming mirror shipments in the North America market climbed 10% from the prior-year level to 3,566,000 units. Shipments also rose 15% year over year in the International market to 8,215,000 units. Total shipments rose 13% year over year to 11,780,000 units.

Other net sales, which include dimmable aircraft windows and fire protection products, dropped 42% from the year-ago quarter to $8.1 million. Dimmable aircraft window sales plummeted 70% year over year for the January-March period. Gentex expects dimmable aircraft window sales to continue being impacted until the aerospace industry recovery begins and Boeing 787 aircraft production levels get a boost.

Financial Tidbits

Total operating expenses decreased 4% year over year to $49.5 million for first-quarter 2021 amid lower R&D expenses. Engineering and R&D expenses fell to $27.6 million from $29.6 million recorded in the year-ago period. SG&A expenses were almost on par with year-ago level of $21.9 million.

Gentex paid dividends of 12 cents per share during the quarter under review. During the March-end quarter, it repurchased 2.8 million shares of its common stock at an average price of $35.46 per share. As of Mar 31, 2021, the company had 6.7 million shares available for repurchase.

Gentex — which shares space in the same industry with firms including Adient ADNT, Magna International MGA and American Axle & Manufacturing AXL — currently carries a Zacks Rank #3 (Hold). As of Mar 31, 2021, it had cash and cash equivalents of $455.9 million. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Projections

Based on the mid-April 2021 IHS Markit forecast, light vehicle production in Gentex’s primary markets is expected to soar 10% year over year for the current year. Amid the encouraging backdrop, it expects higher year-over-year revenues in 2021. The company envisions net sales in the band of $1.94-$2.02 billion, indicating an increase from 2020 revenues of $1.68 billion. Gross margin is anticipated in the range of 39-40%. Capital expenditure and operating expenses are estimated within $85-$95 million and $210-$220 million, respectively. For calendar year 2022, the firm expects sales growth of 8-13% year over year.

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