Gentex drop in fourth-quarter profit

Gentex Corp., a US producer of automatic-dimming rear-view mirrors, reported recently that fourth-quarter profit slid about 5% due to excess manufacturing capacity and price cuts to some of its bigges…

Gentex Corp., a US producer of automatic-dimming rear-view mirrors, reported recently that fourth-quarter profit slid about 5% due to excess manufacturing capacity and price cuts to some of its biggest automotive customers. Gentex reported net earnings of US$ 16.8 million, or 22 cents per share, compared with US$ 17.8 million, or 24 cents per share, a year earlier. Estimates from Wall Street analysts called for a profit of 21 cents to 23 cents per share, with an average of 22 cents, according to research firm Thomson Financial/First Call. The company, which also makes products for commercial fire protection, said fourth-quarter sales rose about 7% to US$ 79.7 million from US$ 74.9 million. Gentex forecast growth of 15% to 20% in its automotive business for 2002. While North American production of cars and light trucks slid 3% in the fourth quarter, the company“s automotive unit shipments grew about 10% to about 1.9 million units on strength in demand for light-truck mirrors, Gentex said. International mirror unit shipments, which rose by 8% during the fourth quarter and 21% during 2001 as compared with year-earlier periods, are growing as a percentage of total volume, Gentex said. The company also said its heavy investment in research and development – about 7% of net sales – forced it to pay a “short-term financial penalty.”