Superior Industries International Inc.
Superior Industries International Inc. has made profitable inroads into the aluminum truck and auto wheel market, reporting an 18 percent increase in income during 1997. Its stock, meanwhile, has risen about 20 percent during the same period.
The Van Nuys-based firm provides wheels and chrome products to auto manufacturers, including Ford Motor Co., Volkswagen of America and Toyota Motor Corp. Last week it won a multi-year contract to provide aluminum road wheels for General Motors Corp.’s Cadillac DeVille.
Superior’s business has benefited from the increasing demand for cast aluminum wheels over steel wheels. Auto manufacturers say the lighter aluminum wheels provide a sportier look for the fast-selling light truck and sport utility vehicle lines. The wheels also provide higher profit margins for manufacturers, according to Eric Goldstein, an analyst at Bear, Sterns.
Goldstein projects earnings of $2.15 per share for 1998 (compared with $1.97 for 1997), based on continued market penetration and increased efficiencies in the company’s operations, he said.
R. Jeffery Ornstein, chief financial officer and treasurer for Superior, said the company expects to invest $45 million in capital improvements this year.
Much of that money will go toward exploring new product applications for its aluminum casting process and expanding its manufacturing plants overseas.
The company started its first international joint-venture manufacturing operation in Hungary last year, which started production in October and should be delivering 1.5 million wheels by the end of 1998. Superior is finalizing plans to open plants in Brazil and expand operations in Chihuahua, Mexico, later this year. The Chihuahua expansion will double the plant’s capacity to about 2.2 million wheels a year.
Superior just reported first-quarter net income of $12.8 million, up 11 percent from the like period last year. Revenues were $136 million, up 8 percent from the first quarter last year.