Automotive mirror supplier Gentex Corp. said ongoing supply chain issues and a decrease in light-vehicle production led to lower first-quarter profits and sales.
The automatic dimming rearview mirror and camera-based driver-assistance system company said Friday first-quarter net income decreased 23 percent to $87.5 million. Gentex earnings are typically watched closely as a quarterly bellwether for other suppliers' results.
Because of increased expenses and decreased sales, gross margin also decreased, falling to 34.3 percent.
Operating expenses increased 15 percent to $57.1 million, caused by higher cost of raw materials, freight expenses and labor. The company also hired additional workers for new product development, it said.
Net sales fell 3.2 percent to $468.3 million, with automotive net sales dropping 3.7 percent. Global light-vehicle production decreased 5 percent, which had a significant impact on the supplier's performance in the quarter, Gentex said.
Baird Equity Research said in a statement Friday that the supplier had 11 percent higher sales than Baird's original estimate. Baird said Gentex also fared better than expected in earnings per diluted share and gross margins.
Despite the lower results compared with the first quarter of 2021, the company's performance improved significantly from the previous quarter. Fourth-quarter net income dropped 41 percent to $84.2 million.
Gentex shares increased 4.2 percent to $29.81 in mid day trading Friday.
Gentex also announced that it repurchased 2.44 million shares in the first quarter at an average price of $29, leaving 22.4 million shares for the company to repurchase as part of a previously announced buyback plan.
Looking forward, the company predicts light-vehicle production will increase 9 percent in the calendar year based on IHS Markit's forecasts.
Gentex, based near Grand Rapids, Mich., ranks No. 86 on the Automotive News list of the top 100 global suppliers, with worldwide parts sales to automakers of $1.65 billion in 2020.
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