Zacks_Analysts' Blog : Stoneridge Misses Estimates - Analyst Blog

Stoneridge Inc. (SRI) showed a profit of $649,000 or 3 cents per share in the third quarter of the year, in sharp contrast to a loss of $843,000 or 4 cents per share in the same quarter of the prior year. However, the company missed the Zacks Consensus Estimate by 8 cents per share.

Sales in the quarter rose 36% to $160.4 million. The improvement in sales and profit was attributable to an increase in global vehicle production volume. The vehicle production volume appreciated 26.3% in the North American passenger car and light truck markets, 25.1% in the North American medium- and heavy-duty truck markets and 76% in the European medium- and heavy-duty truck markets.

The company’s equity earnings increased to $3.9 million from $3.4 million a year ago. This was driven by the improved profitability of PST Eletronica S.A. – the Brazilian joint venture of the company.

Stoneridge had cash and cash equivalents of $84.9 million as of September 30, 2010, down from $91.9 million as of December 31, 2009. The fall in cash balance was attributable to higher accounts receivable balances related to an increase in sales. In the first nine months of 2010, the company’s net cash flow from operations improved to $3.2 million compared with an outflow of $2.6 million a year ago.

Stoneridge completed the refinancing of its unsecured $183 million 11.5% notes on October 4, 2010, that was supposed to mature on May 1, 2012. The company has issued $175 million 9.5% new senior secured notes, which will mature on October 15, 2017. It has also extended the maturity of its Asset Based Lending facility until November 1, 2012.

Stoneridge, a Zacks #3 Rank (Hold) stock, designs and manufactures engineered electrical and electronic components, modules, and systems for the medium and heavy-duty truck, agricultural, automotive, and off-highway vehicle markets primarily in North America and Europe. The company expects to record sales in the range of $630 million to $640 million for the full year 2010.