Gentherm (THRM) Misses Q2 EPS by 2c, Revenues Miss

July 25, 2019 6:10 AM EDT

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Gentherm (NASDAQ: THRM) reported Q2 EPS of $0.47, $0.02 worse than the analyst estimate of $0.49. Revenue for the quarter came in at $243.33 million versus the consensus estimate of $251.79 million.

  • Product revenues of $243.3 million decreased 8.7% from $266.4 million in the 2018 second quarter
  • Excluding the impact of foreign currency translation, divested assets and assets held for sale, product revenues decreased 1.9% year over year
  • GAAP diluted earnings per share was $0.08 as compared to $0.45 for the prior-year period
  • Adjusted earnings per share (see table herein) was $0.47. Adjusted earnings per share in the prior-year period was $0.58
  • Secured automotive new business awards totaling $260 million
  • Repurchased $25 million of the Company’s stock

Phil Eyler, the Company's President and CEO, said “We continued to make progress with our focused growth strategy, achieved our highest gross margin rate in five quarters and reduced operating expenses by 14 percent from a year ago. Our Medical business grew double digits in the quarter as we successfully added Stihler products to our portfolio.”

“In Automotive, we secured over $2.2 billion of new awards from top auto makers around the world in the last six quarters and consistently outperformed actual light vehicle production in our key markets. However, the production environment continues to deteriorate, putting downward pressure on our revenue growth trajectory. While we are reducing our revenue guidance for 2019, we are tightening our gross margin range and 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 second quarter results and the challenging macroeconomic environment, Gentherm is updating its revenue and gross margin guidance, while maintaining all other guidance metrics, for 2019 excluding the impact of foreign currency translation, divested assets and assets held for sale as follows:

  • Product revenues are expected to grow between 0% and 2%
  • Operating expenses between 19% and 20% of product revenues
  • Gross margin rate between 29% and 30%
  • Adjusted EBITDA between 14% and 15% of product revenue
  • Full-year effective tax rate between 28% and 30%
  • Capital expenditures between $40 and $50 million

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



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