Stoneridge Inc.
(
SRI
) 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. With this, 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.
Excluding the contribution of PST, revenues went up 2.8% to $195.8
million during the quarter due to rise in production volumes in the
agricultural and off-road markets.
Cost of goods sold increased 18.3% to $180.6 million compared with
$152.7 million in the second quarter of 2011. SG&A expenses
escalated 71.7% to $52.0 million or 22.2% of sales from $30.3
million or 15.9% in the year ago quarter. Operating income slashed
78% to $1.6 million in the quarter from $7.4 million in the
year-ago quarter.
Financials
Stoneridge had cash and cash equivalents of $39.2 million as of
June 30, 2012 compared with $78.7 million as of December 31, 2011.
Long-term debt was $218.9 million as of June 30, 2012, compared to
$227.9 million as of December 31, 2011.
In the first six month period ended June 30, 2012, operating cash
flow was $15.3 million compared to a cash outflow of $23.1 million
in the prior-year period. Capital expenditures were $14.4 million
in the period, compared to $14.1 million a year ago.
Outlook
For 2012, Stoneridge expects revenues between $970 million and
$1.01 billion. Gross margin is projected in the range of 24.5% to
26.5%. Operating margin is expected in the range of 4.5% to 6.0%.
The company also anticipates earnings per share in the band of 75
cents to $1.30 for the full year.
Our Take
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.
Products diversity creates competition, which varies from market to
market. The company competes with
Delphi Automotive PLC
(
DLPH
) and
TRW Automotive Holdings Corp.
(
TRW
). Currently, it retains a Zacks #5 Rank, which translates
into a short-term (1 to 3 months) Strong Sell rating.
DELPHI AUTO PLC (DLPH): Free Stock Analysis
Report
STONERIDGE INC (SRI): Free Stock Analysis
Report
TRW AUTOMTV HLD (TRW): Free Stock Analysis
Report
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