NEW YORK - China Automotive Systems, Inc. (NASDAQ:CAAS), a prominent supplier of power steering components and systems in China, reported a significant earnings beat for the fourth quarter, surpassing analyst expectations.
The company announced a Q4 EPS of $0.36, which was $0.24 higher than the analyst estimate of $0.12. Revenue for the quarter was also robust at $159.2 million, exceeding the consensus estimate of $140.82 million.
The company's stock surged by 8% following the announcement, indicating a positive investor response to the earnings beat and the company's future prospects. The driver behind the stock's notable ascent was attributed to the earnings surpassing expectations and the company's future revenue guidance, which was more optimistic than analysts had predicted.
For the fiscal year 2024, China Automotive Systems provided revenue guidance of approximately $605 million, which is above the consensus estimate of $593.1 million. This upbeat guidance suggests confidence in the company's growth trajectory and operational performance in the coming year.
In the fourth quarter of 2023, China Automotive Systems saw a 23.6% increase in net sales compared to the same quarter the previous year.
The company's gross profit also rose by 38.8% to $34.7 million, with gross margin improving to 21.8% from 19.4% in the fourth quarter of 2022. These results were primarily driven by a change in product mix and higher demand for passenger automobiles and commercial vehicles.
The company's CEO, Mr. Qizhou Wu, expressed pride in the company's performance, highlighting a 24.6% increase in electric power steering (EPS) products, which now account for 33.8% of total net sales in 2023. He also noted strong growth in Brazil, which compensated for weaker performance in North America.
Mr. Jie Li, the CFO of China Automotive Systems, commented on the company's strong balance sheet, with total cash and cash equivalents, pledged cash, and short-term investments reaching $166.3 million at year-end. He emphasized the company's ability to overachieve modest goals by improving product mix, controlling costs, and regaining revenue growth.
The company's financial statements for the fiscal year 2023 showed an 8.8% increase in net sales to a record $576.4 million, with gross profit rising by 24.5% to $103.8 million. The operating income saw a dramatic increase of 390.0% to $39.2 million compared to the previous year.
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