October 21, 2009 / 2:24 PM / 10 years ago

UPDATE 2-Gentex profit beats forecast, shares jump

* Q3 EPS 17 cents; Wall Street view 12 cents

* Sees 30-35 percent rise in fourth-quarter revenue

* Shares up nearly 20 percent (Adds comments from executives and analyst, profit margins)

DETROIT, Oct 21 (Reuters) - Auto parts maker Gentex Corp (GNTX.O) posted a better-than-expected rise in third-quarter profit and forecast a strong increase in revenue for the fourth quarter, sending its shares soaring nearly 20 percent.

Gentex, which makes auto-dimming rearview mirrors and other vehicle parts, cited improving production volumes by its automaker customers.

The company said it was “cautiously optimistic” that the U.S. auto industry had seen the trough of a bruising downturn that pushed major U.S. vehicle makers and parts suppliers into bankruptcy earlier this year.

Gentex on Wednesday kicked off the third-quarter earnings season for the U.S. auto supply sector. JPMorgan analyst Himanshu Patel said the company’s strong results bode well for other suppliers scheduled to report in coming weeks.

“We now work to fully staff production areas that had been producing significantly lower volumes,” Gentex Senior Vice President Enoch Jen said in a statement. “This situation requires us to operate with more overtime to meet the higher production schedules.”

Third-quarter net income rose to $23.9 million, or 17 cents per share, from $15.1 million, or 11 cents a share, a year earlier. Revenue rose 2 percent to $155.7 million.

Analysts on average expected Zeeland, Michigan-based Gentex to earn 12 cents per share on revenue of $137.8 million, according to Thomson Reuters I/B/E/S.

Gross profit margin improved to 34.9 percent in the third quarter from 30.5 percent a year earlier, driven by cost reductions.

Gentex said it expects fourth-quarter revenue to rise 30 percent to 35 percent from a year earlier as automakers rush to build inventories after steep production cuts in the summer.

Analysts and auto industry executives have said the U.S. market is headed for a gradual recovery in the next few years. Sales this year are expected to hit their lowest level in nearly three decades.

Forecasting firm J.D.Power & Associates said on Wednesday U.S. auto sales are on track to increase to 11.5 million vehicles in 2010 and 13.6 million in 2011. Sales this year are projected at slightly above 10 million vehicles.

Shares of Gentex were up 19.7 percent at $17.38 in late-morning Nasdaq trading. (Reporting by Soyoung Kim; Editing by Lisa Von Ahn and John Wallace)

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