Gentherm (THRM) Tops Q3 EPS by 16c

Gentherm (NASDAQ: THRM) reported Q3 EPS of $0.68, $0.16 better than the analyst estimate of $0.52. Revenue for the quarter came in at $240.06 million versus the consensus estimate of $248.01 million.

Third Quarter Highlights

• Product revenues of $240.1 million decreased 8.2% from $261.5 million in the 2018 third quarter
• Excluding the impact of foreign currency translation, divested assets and assets held for sale, product revenues decreased 2.8% year over year
• GAAP diluted earnings per share was $0.48 as compared to a loss per share of $0.01 for the prior-year period
• Adjusted earnings per share (see table herein) was $0.68. Adjusted earnings per share in the prior-year period was $0.54
• Secured automotive new business awards totaling $270 million
• Repurchased $25 million of the Company’s stock

Phil Eyler, the Company's President and CEO, said “I am pleased with our strong performance on profitability in the quarter despite the continued headwinds in the automotive industry. We achieved our highest gross margin rate in nine quarters and delivered the highest quarterly adjusted EBITDA in two and a half years. In Automotive, we secured over $2.5 billion of new awards from top auto makers around the world in the last seven quarters and have consistently outperformed light vehicle production in our key markets. We continue to make progress on ClimateSense®, as evidenced by the successful development project results presented by General Motors and Gentherm at the SAE Thermal Management Systems Symposium.”

“However, the production environment continues to deteriorate, putting downward pressure on our revenue outlook. Nonetheless we are maintaining our profitability guidance as we continue to improve our cost performance through the Fit-for-Growth program,” continued Eyler.

Guidance

Based on the Company’s year-to-date results, the continued challenging macroeconomic environment, as well as the impact of the strike at General Motors, Gentherm is updating its guidance for 2019 excluding the impact of foreign currency translation, divested assets and assets held for sale as follows:

• Product revenues are expected to decline approximately 3%
• Gross margin rate is expected to be approximately 29.5%
• Operating expense is expected to be approximately 20.5% of product revenues
• Adjusted EBITDA is expected to be approximately 14% of product revenues
• Full-year effective tax rate between 28% and 30%
• Capital expenditures are expected to be approximately $30 million

For earnings history and earnings-related data on Gentherm (THRM) click here.

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