Gentex Corp.'s third-quarter net income rose half a percent to $111.9 million, but the supplier cut its full-year revenue outlook amid lower expected vehicle production and the ongoing UAW strike at General Motors.
Revenue in the third quarter rose 4 percent to $477.8 million from the year-ago period despite a 3 percent drop in global light-vehicle production. Gentex said the GM strike negatively impacted sales by 2 percent in the third quarter.
The company said based on order changes over the last several weeks from GM, it estimates lost sales from the strike to be $7 million to $8 million per week. The supplier of automatically dimming mirrors and other components lowered its full-year revenue guidance to $1.84 billion to $1.87 billion from a previous range of $1.87 billion to $1.9 billion.
Due to changes to the IHS Markit production outlook and the company's estimates of additional lost revenue until the end of the GM strike, Gentex predicts revenue for the fourth quarter will be between $430 million and $455 million.
"For much of the year, actual light-vehicle production levels have fallen well short of estimates, and this trend unfortunately continued in the third quarter of 2019," said CEO Steve Downing in a statement. "This lower-than-expected performance in vehicle production in the third quarter of 2019 was despite the fact that the third quarter of 2019 had easier comparisons on a quarter-over-quarter basis."
Shares of Gentex rose 1.3 percent to close at $27.95 on Friday.
The supplier said its gross margin of 37.7 percent, which stayed roughly flat from last year's third quarter, was impacted by 110 basis points due to incremental tariffs. Operating expenses were up 15 percent, at $52.2 million, from the third quarter of 2018.
"Operating expenses ran slightly ahead of our expectations for the third quarter of 2019, but we believe that operating expenses in the fourth quarter will be more in line with the growth rates from the first half of 2019 and within our annual guidance range provided," the third-quarter report said.
Gentex ranks No. 90 on the Automotive News list of the top 100 global suppliers, with worldwide part sales to automakers of $1.79 billion in its 2018 fiscal year.