China Automotive Systems (CAAS) Misses Q2 EPS by 9c, Revenues Miss
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China Automotive Systems (NASDAQ: CAAS) reported Q2 EPS of ($0.13), $0.09 worse than the analyst estimate of ($0.04). Revenue for the quarter came in at $83.2 million versus the consensus estimate of $87.03 million.
Second Quarter 2020 Highlights
- Net sales were $83.2 million as compared to $105.7 million in the second quarter of 2019;
- Gross profit was $7.8 million and the gross margin decreased to 9.4% from 14.4% in the second quarter of 2019;
- Loss from operations was $5.2 million compared with income from operations of $2.6 million in the second quarter of 2019;
- Net loss attributable to parent company's common shareholders was $4.1 million, or diluted loss per share of $0.13, compared to net income attributable to parent company's common shareholders of $2.5 million, or diluted earnings per share of $0.08, in the second quarter of 2019.
Mr. Qizhou Wu, chief executive officer of CAAS, commented, "Our sales in the second quarter of 2020 continued to show the enduring impact of the COVID-19 pandemic. In the second quarter of 2020, China's economy resumed its growth as GDP increased by 3.2%. This growth rate was far below historical performance but was an improvement over the 6.8% economic contraction of the first quarter of 2020 which was severely impacted by the COVID-19 pandemic. Automobile sales declined by 16.9% year-over-year in the first half of 2020 with passenger vehicle sales down by 22.4% as MPV sales declined by 45.7%, sedan sales decreased by 26.0%, SUV sales were 14.9% lower and crossover vehicle sales were down by 19.8% according to statistics from the China Association of Automobile Manufacturers ("CAAM)."
"In the United States, the pandemic caused GDP to tumble at an annual rate of 32.9% in the second quarter of 2020, the largest quarterly decline in history. It has been estimated that 15 million Americans have become unemployed since February 2020 and consumer spending in the U.S. is down at a 34.6% annual rate in the second quarter of 2020, the largest decline ever recorded. U.S. auto sales declined by 33.3% in the second quarter of 2020 from a year earlier due to the coronavirus pandemic as passenger car sales declined by 46.9% while sales of trucks, minivans and SUVs for the quarter dropped by 27.7%."
"We believe the worst is behind us in China and the government has rolled out a series of new fiscal and monetary policies to promote continued economic growth," Mr. Wu concluded.
Jie Li, chief financial officer, commented, "We continued to generate positive cash flow despite lower sales and we focused on maintaining our excellent balance sheet to help retain shareholder value."
For earnings history and earnings-related data on China Automotive Systems (CAAS) click here.
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