Shares of Gentex reportedly plunged as much as 11% on Wednesday after the rear view mirror specialist sent mixed signals to investors by raising its quarterly dividend while cutting shipment targets.
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CBS Marketwatch said the shares fell $US2.38, or 6%, to close at $33.46, rebounding from a 52-week low of $32 hit earlier in the session.
The Zeeland, Michigan-based company, which makes mirrors that dim in proportion to the amount of headlight glare from other vehicles, reportedly warned that third-quarter shipments would come in lower than expected, blaming weaker demand from automakers, which have slowed their production in efforts to cut into their mounting inventories.
North American light vehicle production declined 11% in July, which was more than expected, CBS Marketwatch noted.
Gentex reportedly cut its auto-dimming mirror unit shipment growth estimate to 10% from 15% in the quarter and said margins could come under short-term pressure. Targets for fourth quarter shipment growth for the mirrors, which account for about 95% of the company’s total revenue, remained at 15%.
Analysts reportedly had been expecting Gentex’s third-quarter earnings to be 35 cents a share on $125 million in sales, according to a survey by Thomson First Call
Gentex raised its quarterly cash dividend by 2 cents to 17 cents a share, payable October 7, 2004.
“[The dividend] signifies our confidence in the company’s future growth prospects, despite the fact that we sell our auto- dimming mirrors into the automotive market, which can be and has been unpredictable this year,” executive VP Garth Deur told CBS Marketwatch.
