Gentex's revenue slipped 1 percent, yet it posted record second-quarter earnings, helped by tariff reimbursements
Revenue went down. Profit went up. Gentex Corporation reported net sales of $651.3 million for the quarter ended June 30, a decline of 1 percent from $657.9 million a year earlier, and net income attributable to the company of $114.7 million, up 19 percent from $96.0 million. Diluted earnings were $0.54 a share against $0.43, which the company called a record for a second quarter.
The gap between the shrinking top line and the growing bottom line was gross margin. It reached 37.0 percent, up from 34.2 percent a year earlier, a gain of 280 basis points. Gentex said about $18 million of that improvement came from IEEPA tariff reimbursements that reduced cost of goods sold during the quarter, alongside a favorable product mix, and that both were partly offset by higher commodity costs. The company received roughly $38 million of such reimbursements in total. It raised its full-year gross-margin guidance to a range of 34.5 to 35.5 percent, from 34 to 35 percent.
Underneath the numbers, the automotive business was regional. Revenue there fell about 3 percent, with declines in Europe, Japan and Korea, and China offset by strength in North America. China revenue dropped about 20 percent, which the company tied to the tariff dispute. Total auto-dimming mirror shipments fell 10 percent to 10.4 million units, and international interior mirror shipments dropped 26 percent. Two non-automotive lines grew: premium audio revenue rose 16 percent to $51.7 million, and the other-products category, which spans aerospace, fire protection and biometrics, gained 12 percent.
Gentex repurchased 2.7 million shares for $66.0 million during the quarter and held its dividend at $0.12 a share. It left full-year revenue guidance unchanged at $2.65 billion to $2.75 billion and trimmed planned capital spending to $115 million to $125 million, from $125 million to $140 million. Chief executive Steve Downing said the quarter delivered "record second-quarter earnings per share of $0.54, an increase of 26 percent."
