Gentex Corp. (GNTX) stock fell about 6% on Friday after the company reported weaker-than-expected third-quarter results, with earnings and revenue missing Wall Street expectations.

The company also slightly narrowed its fiscal 2026 guidance while reaffirming its 2027 guidance.

Gentex reported adjusted earnings of 47 cents per share, missing analysts' estimate of 50 cents.

Revenue decreased 1% year over year to $647.7 million, missing the consensus estimate of $670.5 million.

Result Highlights

Automotive revenue declined 4% from the prior-year quarter, reflecting weaker performance in Europe, Japan, Korea and China.

Growth of 3% in North America partially offset the decline, with growth outpacing regional light vehicle production by 800 basis points.

Automotive revenue performance during the quarter reflected expected unit trends and strong content growth across the company's primary markets.

Gross margin contracted slightly to 33.4% from 34.4% a year earlier. The 100 basis point contraction was driven by higher precious metal costs and lower-than-anticipated sales, leading to unfavorable product mix and reduced operating leverage.

Adjusted income from operations fell 4% to $118.8 million, while adjusted net income declined by 6% to $97.8 million.

During the quarter, Gentex repurchased 5.7 million shares for $132.6 million. About 24.3 million shares remained available under the company's share repurchase authorization.

The company held $136.4 million in cash and cash equivalents at the end of the quarter.

Segment Performance and Geographic Mix

Automotive revenue declined 4% year over year to $552.5 million due to certain customer issues and delayed launches in the quarter. Reported results included discrete headwinds in China and from Volkswagen's European business loss.

Excluding China and VW program loss, automotive revenue increased 2% quarter over quarter, led by the North American market and a 13% growth in Europe (excluding the VW program loss), supported by favorable product mix and increased electronic content per vehicle.

In Europe, automotive revenue performance produced a 13% year-over-year growth rate, apart from the Volkswagen program loss, which more than offset the growth in the rest of the region.

Premium Audio revenue increased 27% year over year to $54.7 million.

Other Products revenue rose 5% to $40.5 million, supported by growth in Aerospace and Fire Protection revenues, partially offset by lower aftermarket and accessory sales.

The company continued with its diversification strategy, with non-automotive revenue contributing to 15% of total revenue compared to 12% in the prior year.

Moderates 2026 Outlook While Reaffirms 2027 Outlook

Gentex narrowed its fiscal 2026 sales guidance to $2.65 billion from $2.65 billion to $2.75 billion, compared with the analyst consensus estimate of $2.67 billion.

The company reduced its gross margin outlook to 34% to 34.5%, down from 34.5% to 35.5%, reflecting incremental commodity cost pressures of $10 million to $15 million.

The company also lowered its capital expenditure forecast to $100 million to $115 million.

It also maintained fiscal 2027 sales guidance of $2.8 billion to $2.9 billion, versus the consensus estimate of $2.8 billion.

CEO Steve Downing attributed the $35 million revenue shortfall against its internal forecast to customer-related issues and delayed product launches, despite automotive unit performance meeting expectations.

He said Gentex remains focused on innovation, higher content per vehicle and diversifying its customer base.

Management also highlighted cost headwinds related to supply constraints and rising costs for memory and electronic components, alongside volatile precious metal prices to continue into the fourth quarter.

The company secured its first printed circuit board assembly contract and expects production to begin in 2029.

Gentex expects global light vehicle production to decline about 4% year over year in the fourth quarter of 2026 and about 2% for the full year.

For 2027, it forecasts production to decline 1% in its primary automotive markets of North America, Europe, Japan and Korea, with growth concentrated in China and other markets.

GNTX Price Action: Gentex shares were down 6.76% at $20.27 at the time of publication on Friday. The stock hit a new 52-week low, according to market data.