China Automotive Systems Q1 EPS Exceed Expectations On Higher Margins, Strict Cost Control

China Automotive Systems, Inc. CAAS reported a first-quarter FY23 sales growth of 4.3% year-on-year to $142.24 million, missing the consensus of $142.67 million.
Headquartered in Jingzhou, the automotive company reported an EPS of $0.23, beating the analyst consensus of $0.12.
Higher margins, cost control initiatives, an increase in average selling price, a favorable product mix, and lower unit costs bolstered quarterly earnings.
Gross profit increased by 46.9% to $21.6 million with a gross margin of 15.2%, expanding 440 basis points Y/Y.
Income from operations was $7.7 million compared with a loss from operations of $(1.5) million.
As of quarter-end, the company held $164.3 million in cash and equivalents.
"Our electric power steering ("EPS") products continue to gain market share, and our traditional hydraulic steering products' market share grew as well. In addition to a better product mix, our margins benefitted from stricter cost controls in the first quarter of 2023," said CEO Qizhou Wu.
Outlook: China Automotive Systems reiterated its FY23 guidance. The company sees revenue of $560 million, below the consensus of $566.7 million.
Price Action: CAAS shares are trading higher by 3.19% at $4.85 on the last check Friday.

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