By Adriano Marchese
Gentex has lowered expectations for the year after halting production of goods destined for China and said it has seen numerous cancellations from Chinese customers amid the escalating trade dispute with the U.S.
The technology company, which serves the automotive, aerospace and commercial fire protection industries, has lowered its revenue expectation to $2.1 billion to $2.2 billion for the year, down from a previous range of $2.4 billion to $2.45 billion.
The company noted on Friday that revenue specifically from China could range from anywhere between $50 million and $120 million.
Gentex said it has proactively halted production of interior and exterior mirrors destined for customers in the China market.
The U.S. has imposed a 145% tariff on China goods, while Beijing has retaliated with 125% on U.S. products. While President Trump has hinted at potentially easing the levies on Chinese goods, other tariffs have also been suggested and uncertainty remains.
Gentex said many of the its customers based in China have now canceled or paused orders.
The company said that it is working with these companies "to better understand their ability and willingness to pay the elevated prices resulting from the new tariff rates."
The company has withdrawn its guidance for 2026 due to the uncertainty surrounding the China market, largely due to incremental tariffs on exports there, as well as the economic effects of import and export tariffs on its primary markets.
Chief Executive Steve Downing said gross margins will take a hit as the company adds costs and reimbursements that don't include margin dollars.
"As we move through the year, we will be monitoring revenue closely and adjusting expenses to align to the market conditions," he said.
In the company's first three months of the year, it logged lower net sales of $576.8 million, from $590.2 million a year earlier.
Net income also fell, reaching $94.9 million, or 42 cents a share, from $108.2 million, or 47 cents a share, a year ago.
"Overall, the weakness resulted in a shortfall of expected sales of approximately $25 million to $30 million for the quarter," said Downing.
Write to Adriano Marchese at adriano.marchese@wsj.com
(END) Dow Jones Newswires
April 25, 2025 08:48 ET (12:48 GMT)
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