Superior Industries (SUP) Exceeds Estimates

Superior Industries International, Inc. (SUP) posted income of $14.2 million or 53 cents per share (excluding the loss on sale of the company’s joint venture in Hungary) in the second quarter of 2010, compared with a loss of $21 million or 79 cents per share in the year-ago quarter. The profit, led by an increase in unit shipments, far exceeded the Zacks Consensus Estimate of 21 cents per share.

Consolidated sales more than doubled to $194.6 million from $80.9 million a year ago, driven by a 114% rise in unit shipments and a 14% hike in average selling prices. Sales were higher than the Zacks Consensus Estimate of $155 million.

Unit shipments to Ford Motor Co. (F) increased 68%, General Motors (MTLQQ) shot up 139%, Chrysler jumped 264% and international customers rose 115%.

Gross profit increased to $27.9 million, or 14.3% of net sales, compared with a negative gross profit of $12 million, or 14.9% of net sales in the second quarter of 2009. This was attributed to a rise in wheel production, which significantly affected the absorption of plant-fixed costs. The company’s operating income was $20.6 million, or 10.6% of net sales, versus an operating loss $20.8 million or 25.7% of net sales in the second quarter of 2009.

Superior Industries had cash, cash equivalents and short-term investments of $143.4 million as of June 30, 2010, compared with $169.3 million in the year-ago period. The company has no bank or other interest bearing debt as of the above period.

Superior Industries has a product portfolio geared to suit current market trends. We appreciate the company’s effort to maintain a debt-free balance sheet. We also appreciate the company’s sale of its 50% ownership in the loss making Suoftec joint venture in June this year. The company is currently a Zacks #2 Rank (‘Buy’) in the short term.

SUPERIOR INDS (SUP): Free Stock Analysis Report

About Zacks Investment Research 1766 Articles

Zacks Investment Research is one of the most highly regarded firms in the investment industry. In 1978 Zacks originated the concept of utilizing earnings estimates revisions to make profitable investment decisions. Zacks offers multiple investment products and services to help investors achieve superior returns.


Be the first to comment

Leave a Reply

Your email address will not be published.