Raising 2018 Estimate and Introducing 2019 Estimate; 4Q¬ ¬Beat, Aided by Tax Rate
- 4Q17 (Dec) EPS of 46 cents (vs 31 cents last year), jumped 50% YoY as sales $14.5 million (or 3%) above our projection were amplified by a 5.5% tax rate (adding 13 cents); absent the tax benefit EPS was 33 cents;
- For 2017 EPS increased 18% to $1.41 (from $1.19 in 2017);
- For 2018, our EPS estimate is now $1.61 (from $1.36), up 14% from 2017 impacted by continued penetration, improving gross margins, and lower taxes, partially offset by weaker automotive production;
- Our 2019 EPS estimate is being introduced at $1.78, up 11% from our 2018 projection;
- Cash and investments net of debt amounted to $722 million, or $2.54 per share (equal to 11% of the share price).
Gentex designs and manufactures automatic-dimming rearview mirrors and electronics for the automotive industry, dimmable aircraft windows for the aviation industry, and commercial smoke alarms and signaling devices for the fire protection industry. The company's key business involves designing, developing, manufacturing and marketing interior and exterior automatic-dimming automotive rearview mirrors that use electrochromic technology to dim in proportion to the amount of headlight glare from trailing vehicle headlamps. The company also designs, develops and manufactures various electronics features to the interior and exterior automotive rearview mirrors as well as interior visors and overhead consoles.
Great Lakes Review is located in Cleveland, Ohio, was founded in 1981 and became a division of Wellington Shields & Co. LLC in 2011. Great Lakes Review is a research boutique focused on the fundamentally-oriented investor seeking companies that dominate their respective specialty niche regardless of industry. The objective is to make money for the long-term by gradually accumulating a diversified portfolio from a universe of no more than 30 companies. Although short-term-oriented accounts will be alerted to trading opportunities, aggressive sell recommendations are triggered only by a deterioration in long-term fundamentals, not by short-term blips or investor fancy. Coverage of those names that lose their earnings momentum or earnings predictability may be dropped and replaced with more vital candidates.
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