Superior Industries Down on Q2 Earnings Miss, Revenues Beat - Analyst Blog

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Share price of Superior Industries International Inc. ( SUP ) decreased 0.2% on Aug 1, 2014 to $18.68 after the company reported second-quarter 2014 earnings of 18 cents per share, missing the Zacks Consensus Estimate of 23 cents. Earnings per share decreased 21.7% from 23 cents in the comparable quarter of 2013. Meanwhile, net income declined 20.6% to $5.0 million from $6.3 million in the year-ago quarter.

Superior Industries International, Inc - Earnings Surprise | FindTheBest

Revenues for the quarter were in line with the year-ago figure of $199 million but surpassed the Zacks Consensus Estimate of $187 million. Unit shipments increased 1% to 3.0 million.

Gross profit decreased 3.1% to $15.7 million (7.9% of sales) from $16.2 million (8.2% of sales) in the prior-year quarter. The decline can be attributed to increased factory costs, partially offset by a marginal increase in unit sales volume.

Selling, general and administrative expenses (SG&A) increased 2.8% to $7.3 million (3.7% of sales) in the quarter, from $7.1 million (3.6% of sales) in the prior-year quarter. Expenses increased on higher professional service fees, legal expenses and stock based compensation costs.


Operating income decreased 7.7% to $8.4 million from $9.1 million a year ago. The decrease was due to lower gross profit.

Capital Deployment

Superior Industries repurchased $29.3 million worth of shares under its previously announced $30 million repurchase program. The company is also constructing a new manufacturing plant in Mexico, which is expected to start production by the end of 2014. The plant will initiate full scale production by the second half of 2015.

Facility Closure

Superior Industries is planning to close the Rogers, Arkansas facility by the end of this year. This closure will lead to labor cost savings of $15 million owing to the retrenchment of 500 employees.

Financial Details

As of Jun 29, 2014, Superior Industries had a working capital of $233.6 million, including cash, cash equivalents and short-term investments of $130.4 million. This compared unfavorably with working capital of $284.8 million including cash, cash equivalents and short-term investments of $203.1 million as of Dec 29, 2013. Investments in various plants along with the new wheel manufacturing plant being constructed in Mexico and the repurchase of the company's common stock led to the decline in working capital. Notably, the company had no bank or other interest-bearing debt at the end of the quarter.

Other Stocks to Consider

Superior Industries carries a Zacks Rank #3 (Hold). Better-ranked stocks worth considering in the same industry include Meritor Inc. ( MTOR ), China Automotive Systems Inc. ( CAAS ) and Magna International Inc. ( MGA ). Both Meritor and China Automotive sport a Zacks Rank #1 (Strong Buy), while Magna International carries a Zacks Rank #2 (Buy).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: SUP , MGA , MTOR , CAAS

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