Gentex third-quarter net income falls to $90.6 million on lower sales and margin
Gentex also updated its 2026 revenue guidance to approximately $2.65 billion and repurchased $132.6 million of stock in the quarter.
Key takeaways
- Gentex Corporation (GNTX) reported third-quarter net sales of $647.7 million, down from $655.2 million a year earlier, and net income of $90.6 million, down from $101.0 million. It updated 2026 revenue guidance to approximately $2.65 billion, from $2.65 billion to $2.75 billion, according to a regulatory filing.
Gentex Corporation (GNTX) said in a regulatory filing Friday that third-quarter net sales were $647.7 million, down from $655.2 million a year earlier, and net income attributable to the company was $90.6 million, down from $101.0 million. The Zeeland, Michigan, company also updated several of its 2026 guidance figures.
Here's how the company did:
- Net sales: $647.7 million vs. $655.2 million a year earlier
- Gross margin: 33.4% vs. 34.4% a year earlier
- Income from operations (GAAP): $115.1 million vs. $122.3 million a year earlier
- Earnings per diluted share (GAAP): $0.43 vs. $0.46 a year earlier
- Adjusted earnings per diluted share (non-GAAP): $0.47 vs. $0.47 a year earlier
The adjusted figures exclude impairment charges and severance costs. In 2025 they also excluded acquisition-related costs. Adjusted net income was $97.8 million, compared with $103.7 million a year earlier.
Revenue came in about $35 million below the company's forecast at the start of the quarter, the company said, because of customer issues and delayed program launches.
"Our third quarter results demonstrate the resilience of our business and the continued benefits of our strategy to grow through technology, product mix, and diversification," said President and CEO Steve Downing.
Automotive net sales were $552.5 million, compared with $573.7 million a year earlier. North American automotive revenue rose about 3% even as regional light vehicle production fell 5%, the filing said.
In Europe, automotive revenue grew 13% excluding the Volkswagen program loss. That loss was a $16.6 million quarter-over-quarter revenue headwind.
Revenue in China fell 44% to $22.1 million from $39.1 million, according to a regional sales table in the filing.
Non-automotive revenue rose about 17% and made up 15% of total revenue, up from 12% a year earlier. Premium Audio net sales rose 27% to $54.7 million from $43.0 million.
Other Products net sales rose 5% to $40.5 million. Aerospace revenue rose 135% and Fire Protection revenue rose 36%, while aftermarket and accessory sales declined.
Gross margin fell to 33.4% from 34.4%. The company attributed the decline mainly to higher precious metal costs and lower-than-anticipated sales, which hurt product mix and operating leverage.
Downing said precious metal costs have been an "ongoing headwind over the last few quarters."
Operating expenses were $101.3 million, down from $102.8 million. Adjusted operating expenses were $97.5 million, compared with $101.8 million.
"Despite the decrease in operating expenses, our teams continue to execute on a significant number of launches and core R&D initiatives," said Gentex COO and CTO Neil Boehm.
Other loss was $7.8 million, compared with $1.8 million. The company said the change reflects certain credit loss reserves and investment-related charges, partly offset by higher investment income and gains on asset and investment sales. The effective tax rate was 15.5%, compared with 16.3%.
Net income attributable to the company was $90.6 million. For the first nine months, net sales were $1.97 billion, up from $1.89 billion, and diluted earnings per share were $1.44, compared with $1.31.
Gentex repurchased 5.7 million shares in the quarter at an average price of $23.44, for $132.6 million. Year to date, it has bought back 11.6 million shares for $270.2 million, at an average of $23.28 per share.
As of Sept. 30, about 24.3 million shares remained under its existing repurchase plan. The company said it intends to keep repurchasing shares, though the pace will vary with macroeconomic issues and market trends. It declared cash dividends of $0.12 per share, the same as a year earlier.
The company said it won its first printed circuit board assembly, or PCBA, contract in the third quarter, with production expected to begin in 2029. It is pursuing additional PCBA opportunities with production timelines in or around the same period.
The company updated its 2026 guidance to reflect first-nine-month results, an updated Mobility Global production forecast and all known tariffs effective Oct. 23.
| Item | Updated 2026 guidance | Previous 2026 guidance |
|---|---|---|
| Consolidated revenue | Approximately $2.65 billion | $2.65 billion to $2.75 billion |
| Gross margin | 34.0% to 34.5% | 34.5% to 35.5% |
| Operating expenses, excluding severance and impairments | $395 million to $410 million | $405 million to $415 million |
| Tax rate | 16% to 16.5% | 16% to 17% |
| Capital expenditures | $100 million to $115 million | $115 million to $125 million |
| Depreciation and amortization | $100 million to $105 million | $100 million to $110 million |
The gross margin range includes an estimated $10 million to $15 million of incremental cost increases expected in the fourth quarter. Related recoveries are not expected until the first half of 2027.
The guidance assumes global light vehicle production falls about 4% in the fourth quarter of 2026 and about 2% for full-year 2026, based on the Mobility Global forecast.
For 2027, the company maintained its revenue outlook of $2.80 billion to $2.90 billion. That outlook assumes light vehicle production in its primary markets falls about 1% in 2027.
The company said its teams are working with customers to establish the need for appropriate reimbursement of cost increases, including those for memory and other electronic components and precious metals.
"As we look ahead, we are increasingly confident in the growth opportunities in front of us," said Downing.
The company scheduled a conference call for 9:30 a.m. Eastern on Friday.