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Superior Industries (SUP) Q3 Earnings Miss, Revenues Grow

Zacks

Superior Industries International Inc. SUP reported adjusted loss of 2 cents per share in third-quarter 2017. The Zacks Consensus Estimate for earnings was 36 cents.

Third-quarter 2017 net income, including after-tax expense, came in at $5.1 million, or 20 cents per share.

Revenues were $331.4 million in the reported quarter, higher than $175.6 million in the year-ago quarter. Revenues also surpassed the Zacks Consensus Estimate of $316 million.

Wheel unit shipments were 5 million compared with the prior-year quarter of 2.9 million units. Value-added sales, i.e., net sales minus pass-through charges for aluminum, increased to $187.4 million compared with $98.8 million in the third quarter of 2016.

Gross profit rose to $23.9 million (7.2% of net sales) from $11 million (6.3%) in the year-ago quarter. The increase was due to the addition of the European operations.

Selling, general and administrative expenses jumped to $18.1 million in third-quarter 2017 from $5.7 million in the prior-year quarter.

Financial Details

In third-quarter 2017, Superior Industries’ net cash generated from operating activities was $27.2 million compared with $14.7 million in the year-ago period. The increase was primarily due to a rise in working capital and the addition of European operations, which were partly offset by expenses related to the acquisition.

Outlook

Superior Industries reaffirmed 2017 expectations for net sales, value-added sales, adjusted EBITDA, capital expenditures, and working capital.

The company expects net sales for 2017 to be in the range of $1.1-$1.11 billion. Superior Industries expects value-added sales in the band of $595-$615 million. Adjusted EBITDA is expected to be in the range of $135-$145 million. The company projects capital expenditure to be approximately $85 million. Unit shipments in 2017 are expected in the range of 16.9-17.2 million, unchanged from the prior guidance.

Zacks Rank & Key Picks

Currently, Superior Industries carries a Zacks Rank #3 (Hold).

A few better-ranked automobile stocks worth considering are Allison Transmission Holdings, Inc. ALSN, PACCAR Inc PCAR and Cummins Inc. CMI. While Allison Transmission Holdings sports a Zacks Rank #1 (Strong Buy), both PACCAR and Cummins carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Allison Transmission Holdings has a long-term growth rate of 10%.

PACCAR has a long-term growth rate of 10%.

Cummins has an expected long-term earnings-per-share growth rate of 12.1%.

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