Superior Industries International, Inc. (SUP) has acquired an 8.7% stake in an Indian aluminum wheel manufacturing company, Synergies Castings Ltd., located in Visakhapatnam. The company intends to acquire a total of 26% stake in Synergies by Dec 31, 2010.
Synergies Castings is a 100% export oriented unit (EOU) that manufactures aluminum alloy wheels with painting and chrome plating and other aluminum cast components. The company supplies its products to global automakers including General Motors (MTLQQ), Ford Motor Co. (F) and Toyota Motor Corp. (TM).
In mid-June, Superior Industries divested its 50% equity stake in its Hungarian joint venture, Suoftec Light Metal Products Production & Distribution Ltd., to its partner, Otto Fuchs KG, based in Meinerzhagen, Germany.
While divesting, the company had revealed it would now expand its reach in the emerging markets. Thus, Superior’s buyout of the stake of an Indian company is clearly in line with this strategy.
Asia contributes the lion’s share of growth in the emerging markets. The IMF expects Asian economies to grow 7.1% this year, with key ASEAN economies expanding 5.6%.
Superior Industries International, Inc. returned to profitability in the first quarter of the year by posting an income of $4.7 million or 18 cents per share after reporting losses since the third quarter of 2008.
The profit was led by a recovery in the North American automotive industry and compared with a loss of $22.3 million or 84 cents per share in the year-ago quarter. It also edged past the Zacks Consensus Estimate of a profit of 17 cents per share.
Sales shot up 84% to $150.2 million as unit shipments to all customers increased significantly during the quarter. Operating income was $6.4 million compared with an operating loss of $28 million a year ago.
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