Gentex Q2 Highlights: Earnings Beat, 26% Sales Growth & More

Gentex Corp GNTX reported second-quarter FY23 sales growth of 26% year-on-year to $583.47 million, beating the analyst consensus of $554.56 million.

Automotive net sales improved 27% to $574.1 million. Auto-dimming mirror unit shipments rose 21%.

Light vehicle production increased by 18% in the primary markets of North America, Europe, and Japan and Korea.

Gross profit margin of 33.1% expanded 110 basis points Y/Y due to significantly higher sales levels, manufacturing improvements, cost recoveries from OEMs, and improvements in freight-related costs and product mix.

Operating expenses rose by 5% to $65.8 million. The operating margin was 21.8%, and the operating income rose 48% Y/Y to $127.3 million.

EPS of $0.47 beat the analyst consensus of $0.41.

The company repurchased 0.9 million shares of its common stock during Q2 at an average price of $27.28 per share. It had 18.8 million shares remaining available for repurchase as of June 30, 2023.

The company held $237.7 million in cash and equivalents as of June 30, 2023.

Gentex CEO Steve Downing said, "Additionally, the Company continued to make progress on our path toward improved profitability and we are now executing our next wave of cost improvement initiatives that are necessary for us to accomplish our goal of reaching the 35-36% gross margin range by the end of 2024."

Outlook: Gentex expects FY23 revenue of about $2.2 billion - $2.3 billion (consensus $2.21 billion) versus the prior view of approximately $2.2 billion. It expects FY23 gross margin of 32.5% - 33% (prior view 32% - 33%).

Price Action: GNTX shares are trading higher by 3.46% at $32.85 on the last check Friday.