Gentex Corp. (GNTX) fell the most since it started trading 26 years ago after the maker of rearview mirrors missed analysts’ estimates and said changing customer preferences will hurt profit for the next two years.
Gentex fell 29 percent to $15.01 a share at the close in New York after earlier sliding 32 percent to $14.38, the biggest intraday decline since Gentex shares started trading Jan. 8, 1986. The Zeeland, Michigan-based supplier had $280.3 million in sales, according to a statement today, missing the $283 million average estimate of 10 analysts surveyed by Bloomberg.
The maker of advanced-technology mirrors said that four customers have decided to put rear-camera displays with the radio in the center console of a vehicle, rather than in the mirror. The decisions will have a negative impact on 2013 and 2014 results, Gentex said in the statement.
Gentex also forecast that third-quarter sales would be about the same to 5 percent higher compared with 2011’s third quarter. The company reported second-quarter net income of $40.8 million, or 28 cents a share. The average estimate of 11 analysts was for a profit of 29 cents.
The company’s gross profit margin declined to 33.1 percent in the second quarter, down from 34.7 percent in this year’s first quarter and 35.2 percent a year earlier. The slide was because of annual price reductions and product mix, according to the statement.
“We recognize that we have work to do to improve the gross profit margin,” Chief Executive Officer Fred Bauer said in the statement.
The company expects its third-quarter gross profit margin will increase by about 0.5 percentage point from the second quarter, according to today’s statement.
Gentex also said some customers are “reducing orders at the last minute, making it increasingly difficult to forecast with any degree of certainty.”
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