Superior shares rise on strong 1Q results

NEW YORK - Shares of Superior Industries International Inc. rose Friday, after the aluminum wheel supplier said its first-quarter profit jumped 55 percent on lower costs.

Superior shares rose $2.04, or 10.3 percent, to close at $21.78, after jumping to $23.04 shortly after the market opened.

The company's profit of 12 cents per share beat average Wall Street estimates of 5 cents per share, while sales dropped about 9.3 percent to $222.2 million, below average predictions of $233.8 million.

Superior said the sales decline was partially a result of the ongoing strike at fellow supplier American Axle & Manufacturing Inc., which has forced General Motors Corp. to cut production and orders to other suppliers such as Superior.

Baird analyst David Leiker said the quarter's results are encouraging given the 10 percent drop in shipments and the weak economic environment.

Leiker said that while Superior has been hurt in recent quarter's by its exposure to the U.S.-based automakers and especially U.S. light truck demand, it's beginning to benefit from capacity reductions and decreasing startup losses in Mexico.

"We expect additional improvements in 2008 as these efforts continue to gain traction," Leiker wrote in a note to investors. He rates the shares "Neutral."

"Admittedly, we have low confidence in this expectation, as weakening end-market demand and continued share losses at the domestic OEMs are expected to remain issues this year."

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