Tower International Q1 profit soars as supplier avoids year-ago expenses

on May2

Photo credit: Tower International

Metal components and assemblies supplier Tower International Inc. said its first quarter net income more than doubled as sales rose slightly and the company avoided major costs it faced during the same quarter last year.

The supplier posted net income of $17.3 million in the quarter, up from $8.4 million a year earlier as the supplier had a “modest” increase in production, Tower International CFO Jeffrey Kersten said Tuesday on an earnings conference call with analysts.

Year-over-year total revenue rose 1.7 percent to $497.6 million.

Gross profit declined from $57.1 million to $56.8 million. Last year’s first quarter earnings were brought down by $5.6 million in nonproduction related costs, while the first quarter of 2017 saw $1.4 million in income from discontinued operations.

Adjusted earnings before interest, taxes, depreciation and amortization showed an increase of 2.5 percent to $46.2 million.

“Tower delivered solid financial results in the quarter as revenue and earnings were above our previous outlook,” Tower International CEO Jim Gouin said in a statement. “We continue to invest in the growth of Tower and are well positioned to grow our business at a faster pace than the industry over the coming years.

“This growth will be fueled by what we believe to be (long-term) trends associated with OEM outsourcing driven by lightweighting and changing technologies such as electrification,” he said.

Gouin said on the conference call that the trends will create opportunities for revenue growth as automakers outsource to meet increased demand for aluminum, stronger steels and hot-forming joining technologies for lightweighting, as well as electrification and powertrain technologies.

The supplier’s 2017 outlook was unchanged. It expects a 1 percent increase in total revenue to $1.93 billion.

Tower International, headquartered in Livonia, Mich., ranked No. 88 on Automotive News’ list of the top 100 global automotive parts suppliers.



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