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

Gentex Corporation’s (NASDAQ:GNTX) first-quarter 2019 earnings per share were 40 cents, which beat the Zacks Consensus Estimate of 39 cents. In the year-ago quarter, the company’s bottom-line figure was 40 cents. Its net income declined to $104.3 million from $111.2 million in first-quarter 2018.

During the quarter under review, the company reported net sales of $468.6 million, beating the Zacks Consensus Estimate of $463 million. Moreover, the top line increased 1% from net sales of $465.4 million recorded in the first quarter of 2018.

Quarter in Detail

During the reported quarter, the company recorded gross margin of 36.2%, down from the year-ago quarter figure of 37.1%. The gross margin was adversely impacted by approximately 90 basis points due to impacts of tariffs.

During the quarter under review, auto-dimming mirror shipments in the North American market rose by 10% to 3.5 million and in the International market, it declined 3% to 7.2 million. In total, it rose by 1% year over year to 10.7 million.

Operating expenses during first-quarter 2019 were up 9% to $48 million from $44.1 million in first-quarter 2018.

Share Repurchase

During first-quarter 2019, the company repurchased 4.7 million common shares at an average price of $20.37 per share. As of Mar 31, 2019, Gentex had around 29.1 million shares remaining for repurchase.

Financials

Gentex had cash and cash equivalents of $221.7 million as of Mar 31, 2019, compared with $217 million as of Dec 31, 2018.

Looking Forward

The company reiterated its guidance for 2019. It expects revenues of $1.83-$1.93 billion and operating expenses of $195-$200 million. Further, gross margin is anticipated to be 36-37% in the current year.

Zacks Rank & Stocks to Consider

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

A few better-ranked stocks in the broader auto sector are Geely Automobile Holdings Ltd. (OTC:GELYY) , PACCAR Inc. (NASDAQ:PCAR) and Fox Factory Holding Corp. (NASDAQ:FOXF) . While Geely currently sports a Zacks Rank #1 (Strong Buy), PACCAR and Fox Factory carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Geely’ long-term growth rate is projected at 7%. Over the past three months, shares of the company have gained 28.5%.

PACCAR has an expected long-term growth rate of 8.4%. Shares of the company have gained 16.6% over the past three months.

Fox Factory has an expected long-term growth rate of 15.1%. Shares of the company have gained 29.5% over the past three months.

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