Superior Industries' Shares Fall on Earnings Miss - Analyst Blog

By Zacks Equity Research,

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Share price of Superior Industries International Inc. ( SUP ) decreased 3.2% on May 2, 2014 to $20.24 after the company reported first-quarter 2014 earnings of 18 cents per share, missing the Zacks Consensus Estimate of 20 cents. Earnings per share were in line with the comparable quarter of 2013. Net income declined 2.3% to $4.8 million from $4.9 million in the year-ago quarter.

Revenues for the quarter dropped 11.2% year over year to $183.4 million, lagging the Zacks Consensus Estimate of $187 million. The year-over-year decline was due to an 8% decrease in unit shipments to 2.8 million wheels and a 4% decline in the average selling price resulting from lower aluminum component sales.

Gross profit increased 15.7% to $15.6 million (or 8.5% of sales) from $13.5 million (or 6.5% of sales) in the prior-year quarter. The increase was attributable to lower costs, including labor, maintenance and supply costs, and benefits derived from capital improvements.

Selling, general and administrative expenses (SG&A) increased 10.1% to $7.9 million in the quarter, or 4% of net sales, from $7.2 million or 3% in the prior-year quarter. The increase in expenses was due to executive severance costs partially offset by lower headcount-related costs.

Operating income increased 22.1% to $7.7 million from $6.3 million a year ago. The increase was due to higher gross profit.

Financial Details

As of Mar 30, 2014, Superior Industries had a working capital of $257 million, including cash, cash equivalents and short-term investments of $161.5 million. This compared unfavorably with the working capital of $284.8 million including cash, cash equivalents and short-term investments of $203.1 million as of Dec 29, 2013. The decline in working capital is due to the construction of a new wheel manufacturing plant in Mexico, which will start operation from the first half of 2015. 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). Some other stocks worth considering in the same industry are Gentherm Incorporated ( THRM ), Modine Manufacturing Company ( MOD ) and Magna International Inc. ( MGA ). Both Gentherm and Modine Manufacturing sport a Zacks Rank #1 (Strong Buy), while Magna 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 Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Stocks: MGA , MOD , SUP , THRM

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