Automotive mirror supplier Gentex Corp. said Friday that supply chain challenges led to lower third-quarter profits, but also touted an increase in sales compared to 2021.
The Zeeland, Michigan company, which primarily produces auto-dimming mirrors and camera-based driver assistance systems, said its net profit fell 5% to $72.7 million.
Net sales increased 24% to $493.6 million from $399.6 million in 2021. This coincides with a 22% increase in light vehicle production in the company’s core markets in North America, Europe, Japan and Korea.
Despite increased sales and production, the company missed its early-quarter guidance of $70 million to $80 million.
Operating expenses continue to rise, rising 15% to $60.4 million. Gentex cites personnel and professional costs, as well as transportation and travel costs as causes for the increase.
Gross margin fell 5.5 percentage points to 29.8%. Gentex said raw material costs, labor cost increases and an unfavorable product mix are to blame.
One of the recurring themes of the company’s Friday conference call was supply chain issues. Gentex said up to 30% of its engineering team is focused on redesigning products to deal with shortages. This is the same figure that was reported in the second quarter.
In a statement on Friday, Gentex CEO Steve Downing said: “While there appears to be some improved stability in the light vehicle production environment and in the overall supply chain, the company continues to to experience significant fluctuations in customer orders from week to week and difficulty in sourcing advanced electronic components for our most complex products.”
Shares of Gentex rose 2.54% to $26.28 at market close on Friday.