Stoneridge (SRI) Tops Q2 EPS by 2c; Slight Beat on Revenues; 'Maintains FY18 Guidance Range'

Stoneridge (NYSE: SRI) reported Q2 EPS of $0.55, $0.02 better than the analyst estimate of $0.53. Revenue for the quarter came in at $220.6 million versus the consensus estimate of $220.42 million.

2018 Second-Quarter Results

• Earnings per diluted share attributable to Stoneridge, Inc. ("EPS") of $0.52
• Adjusted EPS of $0.55 (adjustments related to the step-up in the fair value of the earn-out related to the PST transaction and certain business realignment costs)
• Sales of $220.6 million, an increase of 5.5% over Q2 2017
• Gross profit of $67.4 million (30.6% of sales), an increase of 5.2% over Q2 2017 adjusted gross profit
• Operating income of $19.2 million
• Adjusted operating income of $20.1 million (9.1% of sales), an increase of 7.8% over Q2 2017
• Adjusted EBITDA of $28.1 million (12.8% of sales), an increase of 9.4% over Q2 2017

Maintains 2018 Full-Year Guidance Range

• Expect at least 6% annual revenue growth and EBITDA margin expansion of at least 90 basis points relative to 2017
• Guiding to the lower end of the previously provided range due to reduced production forecasts on certain customer platforms, forecasted currency rates for the remainder of the year and recently announced tariffs
• External factors expected to be partially offset by continued margin expansion

Jon DeGaynor, President and Chief Executive Officer, commented, "Stoneridge delivered another strong quarter of financial performance. In addition to our financial results, we are announcing a pending driver information systems award with a global commercial vehicle OEM. The award will build upon our existing global relationship with this customer and it is the first significant driver information system award utilizing our local Brazilian footprint. This award, an extension and expansion of an existing program, will begin production in 2021 with an expected $38 million peak annual revenue. We expect continued growth opportunities in our driver information systems, as well as other electronics product lines, as we expand our commercial vehicle OE capabilities in Brazil."

DeGaynor continued, "In addition to announcing this pending driver information system award, it is important to note the progress Stoneridge is making with MirrorEye. We continue to partner with some of the largest fleets in the United States, including J.B. Hunt, Maverick and Schneider during the trial period and have accumulated over one million safe miles driven with trucks utilizing the MirrorEye system."

2018 Outlook

The Company is maintaining its previously provided guidance range as it expects continued success for the remainder of 2018, but also expects to be negatively impacted by certain macroeconomic conditions.

Bob Krakowiak, Chief Financial Officer, commented, "We expect revenue and EPS performance to be impacted by forecasted production declines in certain platforms for our key customers in China and North America, as well as unfavorable currency conditions in Brazil and Europe and the recently announced import tariffs. We expect operational improvements to offset some of the macroeconomic challenges. We are maintaining our guidance range for the year and guiding to the lower end of the range. The low end of our range suggests at least 6% annual revenue growth and EBITDA margin expansion of at least 90 basis points relative to 2017."

For earnings history and earnings-related data on Stoneridge (SRI) click here.

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