Gentex Corp. (NASDAQ:GNTX) stock fell Friday after the company reported mixed second-quarter results, with earnings topping Wall Street estimates but revenue missing expectations. The company also reaffirmed its fiscal 2026 and 2027 guidance.

Gentex Q2 Earnings Beat On EPS, Miss On Revenue

Gentex reported adjusted earnings of 58 cents per share, beating analysts’ estimate of 50 cents. Revenue increased 1% year over year to $651.3 million but missed the consensus estimate of $669.5 million.

Automotive revenue declined from the prior quarter, reflecting weaker demand in Europe, Japan, Korea and China. Growth in North America partially offset the decline.

Gross margin expanded to 37% from 34.2% a year earlier. The 280-basis-point improvement was driven by about $18 million in IEEPA tariff reimbursements, a favorable product mix and stronger operating execution.

Gross margin also improved 50 basis points from the first quarter despite lower automotive revenue and higher tariff-related costs. Management attributed the sequential improvement to a better product mix and stronger profitability across its Other Products business.

During the quarter, Gentex repurchased 2.7 million shares for $66 million. About 29.9 million shares remained available under the company’s share repurchase authorization.

Segment Performance

Automotive revenue declined to $560.1 million from $578.1 million a year earlier due to lower light vehicle production and fewer auto-dimming mirror shipments.

Premium Audio revenue increased 16% year over year to $51.7 million, driven by demand for Powered Systems and Onkyo products, as well as new product launches.

Other Products revenue rose 12% to $39.4 million, supported by growth in aerospace, biometric solutions and accessories.

Reaffirms Outlook

Gentex’s outlook points to continued pressure in China despite expectations for overall revenue growth. During the earnings call, management said China revenue is expected to decline to about $100 million in 2026 from roughly $150 million in 2025 and $200 million in 2024, adding that sales are likely to remain in decline through 2027.

The company attributed the weakness to ongoing geopolitical tensions, tariff-related disruptions and softer demand, making China one of the biggest headwinds to its automotive business.

Gentex reaffirmed fiscal 2026 sales guidance of $2.65 billion to $2.75 billion, compared with the analyst consensus estimate of $2.69 billion. It also maintained fiscal 2027 sales guidance of $2.8 billion to $2.9 billion, versus the consensus estimate of $2.83 billion.

CEO Steve Downing said the company continued to execute well despite geopolitical challenges in China and ongoing weakness in its core mirror business.

He said Gentex remains focused on innovation, profitability, operational efficiency and disciplined capital allocation, while continuing to improve the financial performance of VOXX following its acquisition.

The company expects new products, including dimmable visors, dimmable sunroofs, fourth-generation Full Display Mirror, driver and interior monitoring systems, and advanced manufacturing initiatives to support growth over the coming years.

Gentex expects global light vehicle production to decline about 2% year over year in the third quarter of 2026 and about 3% for the full year.

It forecasts production to remain broadly flat in 2027, with growth led by emerging markets while North America, Europe, and Japan and Korea continue to face headwinds.

GNTX Price Action: Gentex shares were down 5.55% at $22.49 at the time of publication on Friday, according to Benzinga Pro data.

Image via Shutterstock