ELKHART, Ind. - LCI Industries (NYSE: NYSE:LCII), a supplier of components for the leading OEMs in the recreation and transportation markets, announced a significant beat on earnings expectations for the first quarter of 2024. LCII shares were up 5% in premarket trading.
The company reported earnings per share (EPS) of $1.44, which surpassed the analyst consensus estimate of $0.52 by $0.92. Revenue for the quarter was slightly above expectations at $968.03 million against the consensus estimate of $963.02 million.
Compared to the same quarter last year, LCI Industries saw a slight decrease in net sales by 1%, down from $973.3 million. However, net income showed a remarkable improvement, rising to $36.5 million, or $1.44 per diluted share, from $7.3 million, or $0.29 per diluted share, in the first quarter of 2023. This notable increase in profitability is attributed to robust margin expansion driven by the performance of diversified businesses and consistent operational execution.
Jason Lippert, LCI Industries’ President and CEO, attributed the strong quarter to healthy EBITDA generation and margin expansion, supported by strong operational focus and improved material costs. "As we continue to diversify our business, strength in some of our growing markets like automotive aftermarket, housing, and our transportation businesses has consistently lifted profitability," said Lippert.
He also noted signs of recovery in the North American RV market and anticipated gradual improvements in production, especially in towables, where the company typically provides the majority of its innovative RV content.
The company's Aftermarket Segment reported a 3% decrease in net sales year-over-year, primarily due to lower volumes within marine markets and the impacts of inflation and elevated interest rates on consumer discretionary spending. Despite this, the segment's operating profit margin improved to 11.8% in the first quarter, up from 9.7% in the first quarter of 2023, mainly due to decreased commodity and freight costs and pricing changes to targeted products.
LCI Industries remains committed to operational improvements, inventory reductions, and cash generation. The company's net inventory balance decreased by $34 million in the first quarter and was down $175 million from the first quarter of 2023. The effective tax rate for the quarter was 24.3%, a slight decrease from 24.8% in the same quarter of the previous year.
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