ZEELAND — Despite a decline in light vehicle production globally so far in 2018 and supply issues that affected product deliveries, automotive supplier Gentex Corp. saw higher sales in the first quarter.
The Zeeland-based manufacturer of auto-dimming rearview mirrors and automotive electronics generated $465.4 million in net sales for the quarter that ended March 31, a year-over-year increase of 2.6 percent. The sales gains came in spite of a more than 3 percent dip in vehicle production in the company’s primary markets, according to an earnings statement.
For the quarter, sales to the automotive industry increased 2 percent to $455 million, led by a 7-percent increase in shipments in auto-dimming mirrors. First quarter sales of Gentex’s dimmable aircraft windows and fire protection systems rose 33 percent on a year-over-year basis to $10.4 million.
For the quarter, Gentex (Nasdaq: GNTX) posted net income of $111.2 million, or 40 cents per share, a 14-percent increase from the same period in 2017.
President and CEO Steve Downing cited the company’s ability to outperform the markets it serves as one positive outcome of a quarter in which “we were disappointed in the overall revenue performance,” according to a statement.
An issue with an electronics component supplier that has since been addressed also hampered Gentex’s ability to fill all orders for its Full Display Mirror, which uses a rear-facing camera to show the view behind the vehicle when the rearview mirror is blocked. The company estimated its inability to meet demand negatively affected revenue by about 2 percent.
Driven primarily by increased staffing, the company’s operating expenses also rose $2.7 million, or 6.6 percent, compared to a year ago.
First quarter headwinds aside, Gentex reaffirmed its previous guidance for revenue, gross margin, operating expenses, capital expenditure and depreciation and amortization for the year, largely because of planned launches of the Full Display Mirror on new vehicles and an improvement in the 2018 vehicle production forecast.
Gentex also is feeling the effects of the Tax Cuts and Jobs Act of 2017, which lowered its effective tax rate from 27.7 percent in the first quarter of 2017 to 15.6 percent this year. The company expects its effective annual tax rate to be in the range of 15-18 percent for the year, lower than the 18-21 percent it previously forecasted.