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Stoneridge Inc (SRI) Reports Q3 2023 Earnings with Sales of $238.2 Million

  • Stoneridge Inc (NYSE:SRI) reported Q3 2023 sales of $238.2 million and earnings per share of $0.08.

  • The company's gross profit stood at $52.5 million, representing 22.1% of adjusted sales.

  • Adjusted EBITDA was $17.0 million, marking a 260 basis points increase relative to Q2 2023.

  • Stoneridge Inc (NYSE:SRI) is refining its full-year 2023 guidance, expecting continued strong margin performance.

Stoneridge Inc (NYSE:SRI) released its earnings report for the third quarter ended September 30, 2023, on November 1, 2023. The company reported sales of $238.2 million and earnings per share of $0.08. Adjusted sales for the third quarter were $237.2 million and adjusted EPS was $0.10.

Financial Performance

Stoneridge reported a gross profit of $52.5 million, representing 22.1% of adjusted sales. Operating income was $6.5 million and adjusted operating income was $7.3 million, an increase of 70 basis points relative to the second quarter of 2023. Adjusted EBITDA was $17.0 million, marking a 260 basis points increase relative to the second quarter of 2023.

Company's Commentary

Jim Zizelman, president and chief executive officer, commented,

During the third quarter we continued to take actions to improve our overall margin profile driving significant margin improvement. Our performance was primarily driven by continued material cost improvement and operating cost control resulting in adjusted operating margin expansion of 70 basis points and adjusted EBITDA margin expansion of 260 basis points versus the prior quarter."

2023 Full-year Guidance

Stoneridge Inc (NYSE:SRI) is refining its full-year 2023 guidance to reflect the expectation of continued strong margin performance. The company expects adjusted sales of $965.0 - $975.0 million, adjusted gross margin of approximately 21.5%, and adjusted operating margin of approximately 2.0%. The adjusted EPS is expected to be between $(0.10) - $0.00.

Cash and Debt Balances

As of September 30, 2023, Stoneridge had cash and cash equivalents balances totaling $36.8 million. Total debt as of the same date was $186.0 million, resulting in net debt of $149.2 million.

2024 Preliminary Revenue Guidance

Stoneridge is providing preliminary 2024 guidance for at least 5% growth, which outpaces weighted-average end-markets by at least 6.5%.

Conclusion

Despite some top-line headwinds related to the UAW strike in the fourth quarter, Stoneridge Inc (NYSE:SRI) is expecting continued EPS expansion in the fourth quarter as it continues to build on a strong foundation and drive earnings momentum into 2024.

Explore the complete 8-K earnings release (here) from Stoneridge Inc for further details.

This article first appeared on GuruFocus.

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