Sorl Auto Parts (SORL) Reports Q3 EPS of $0.28, Slight Miss on Revenues; Reiterates FY18 Revenue Guidance Below Consensus

Sorl Auto Parts (NASDAQ: SORL) reported Q3 EPS of $0.28, versus $0.00 reported last year. Revenue for the quarter came in at $108.6 million versus the consensus estimate of $108.98 million.

• Net sales increased by 7.2% to a third quarter record high of $108.6 million compared to $101.3 million in the third quarter of 2017;
• Gross margin for the third quarter of 2018 was 24.3%;
• Income from operations was $6.6 million;
• Net loss attributable to stockholders was $5.6 million and basic and diluted loss per share were $0.29 in the third quarter of 2018;
• Excluding the impact of US tax reform, net income attributable to stockholders for the third quarter of 2018 would have been $5.4 million, or $0.28 per basic and diluted share, compared with net income attributable to stockholders of $8.6 million, or $0.44 per basic and diluted share, in the third quarter of 2017;
• Cash and cash equivalents at September 30, 2018 were $17.6 million with working capital of $88.6 million.

Mr. Xiaoping Zhang, SORL's Chairman and Chief Executive Officer, stated, "Our advanced products maintained our market share in a softer economic growth environment among OEMs in China. However, the growing pool of vehicles beyond their warranty periods and our marketing efforts have continued to create opportunities for increased sales and further market penetration. As the largest aftermarket brake components provider in China, we believe that our increased sales and marketing campaigns enable us to significantly gain market share in the aftermarket segment and increasingly widen the distance over our major competitors while many of our small competitors are encountering a credit crunch and facing possibly discontinuing operations. International sales have also risen due to greater acceptance of our advanced braking products and our expanded geographic marketing. We hope that the trade talk between the U.S. and China will come to an amicable resolution, as America is an important growth market for us. Our high-quality braking products are already being used in many vehicles in America and customer feedback has been positive."

GUIDANCE:

Sorl Auto Parts sees FY2018 revenue of $450 million, versus the consensus of $458.66 million.

For earnings history and earnings-related data on Sorl Auto Parts (SORL) click here.

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