Gentex Stock Drops 6% After Second-Quarter Earnings Disappointed.

Gentex Stock Drops

Gentex Stock Drops

Gentex stock drops , a prominent player in digital vision and connected car technologies, reported a disappointing second-quarter earnings per share (EPS) of $0.37. This result fell short of the analyst consensus of $0.52.

Revenue also lagged behind expectations, totaling $572.9 million compared to the forecasted $622.98 million. Following these results, Gentex’s stock price dropped by 6%.

Year-over-Year Decline

Compared to the same period last year, Gentex saw a 1.8% decline in net sales, which were $583.5 million in Q2 2023. The company cited a significant revenue shortfall in June, with earnings falling approximately $50 million below projections due to reduced shipments to major customers.

During the second quarter of 2024, light vehicle production weakened in most of our primary markets,” noted Steve Downing, President and CEO of Gentex.

Future Outlook and Guidance

Despite current challenges, Downing remains positive about the company’s future. He emphasized ongoing progress with the gross margin recovery plan and expressed confidence in achieving a target margin of 35-36%, even if there is a slight delay.

For fiscal year 2024, Gentex forecasts revenue between $2.4 billion and $2.5 billion, slightly below the analyst consensus of $2.486 billion. Looking further ahead, the company projects revenue of $2.6 billion to $2.7 billion for fiscal year 2025, compared to the consensus estimate of $2.682 billion.

Financial Metrics and Expenses

The gross profit margin for Q2 stood at 32.9%, a slight decrease from 33.1% in the previous year. Operating expenses increased by 12% to $73.7 million, largely due to higher staffing and engineering-related professional fees. Net income also fell to $86.0 million from $109.2 million year-over-year.

Commitment to Share Repurchase Program

In response to recent performance and market conditions, Gentex continues its capital allocation strategy, including a share repurchase program. During Q2, the company bought back 1.4 million shares of its common stock at an average price of $34.43 per share.

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