) lowered its revenues and earnings guidance for 2012 based on
weaknesses in its global operations. However, it has kept intact
its margins guidance for the year.
The company has downgraded its revenue outlook for the year to $940
million-$962 million from the previous range of $970 million-$1.01
billion. The company also anticipates lower earnings per share of
35 cents to 45 cents compared with its prior outlook of 75 cents to
The lower guidance was driven by continued weakness in the European
commercial vehicle business, lower shipments to a big U.S.
commercial vehicle customer, and lower-than-expected second half
revenue from the company's Brazilian operations, PST.
However, the company has kept its margins guidance for the core
business (Electronics and Control Devices segments) and PST largely
intact at 20.5%-22.0% and 40.0%-42.0%, respectively.
It also expects to generate significant free cash flow for the
remainder of the year and eliminate or reduce the borrowing on its
asset-based credit facility in North America, while reducing its
debt level in Brazil.
Stoneridge witnessed a loss of $3.6 million or 13 cents per share
in the second quarter of 2012, compared to a profit of $3.4 million
or 14 cents in the corresponding quarter last year. The EPS missed
the Zacks Consensus Estimate of a profit of 4 cents per share.
The year-over-year fall in earnings was attributable to lower sales
of higher margin products owing to the weak Brazilian economy,
unfavorable foreign currency translation and slow growth in the
North American and European commercial vehicle markets.
Revenues rose 23% to $234.3 million in the reported quarter;
however, it missed the Zacks Consensus Estimate of $247.0 million.
The improvement in revenues was driven by operating benefits of the
Brazilian joint venture, PST.
Headquartered in Warren, Ohio, Stoneridge is engaged in designing
and manufacturing engineered electrical and electronic components,
modules and systems for the commercial vehicles, agricultural,
automotive, and off-highway vehicles and motorcycle markets.
The company competes with
Delphi Automotive PLC
TRW Automotive Holdings Corp.
). Currently, it retains a Zacks #2 Rank, which translates into a
short-term (1 to 3 months) Buy rating. The company will release its
third-quarter 2012 results on October 24.
DELPHI AUTO PLC (DLPH): Free Stock Analysis
STONERIDGE INC (SRI): Free Stock Analysis
TRW AUTOMTV HLD (TRW): Free Stock Analysis
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