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CVR NYSE AM· Chicago Rivet & Machine Co.
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CVR NYSE AM· Chicago Rivet & Machine Co.
Earnings report Q3 2023

CVR's Fastener Segment Revenue Declines in Q3 2023, but Automotive Sales Show Growth

Segments of revenue

In the third quarter of 2023, CVR's fastener segment revenues were $6.98 million, a decline of $828,181 or 10.6% compared to the same period in 2022. For the first nine months of 2023, fastener segment revenues were $22.20 million, a decline of $1.82 million or 7.6% compared to the same period in 2022. However, sales to automotive customers within the fastener segment increased by $370,901 or 7.7% in the third quarter of 2023, reaching $5.18 million.

Strengths

Despite the overall decline in fastener segment revenues, CVR experienced growth in sales to automotive customers. This indicates that demand from the automotive sector, which has been steadily recovering from the effects of the Covid-19 pandemic, remains strong. The increase in sales to automotive customers can be attributed to the recovery in the automotive industry and the company's ability to capture market share in this segment.

Challenges

CVR's fastener segment revenues declined in the third quarter of 2023 compared to the same period in 2022. This decline can be attributed to higher costs that have impacted margins. The company has faced difficulties in obtaining relief from these higher costs due to restrictive contracts common in the automotive market. Additionally, the ongoing United Auto Workers strike, which expanded in the fourth quarter, has resulted in reduced demand for CVR's products.

Noteworthy

CVR's net loss for the first three quarters of 2023 was $(2.86) million, or $(2.96) per share, compared to a net income of $4.18 million, or $4.33 per share, for the same period in 2022. The decline in net income can be attributed to several factors, including the impact of higher costs on margins and reduced demand due to the United Auto Workers strike. However, the company's operating cash flow is expected to provide adequate working capital for the next twelve months.

Summary

CVR's fastener segment revenues declined in the third quarter of 2023, primarily due to higher costs impacting margins. However, the company experienced growth in sales to automotive customers, indicating strong demand in the automotive sector. CVR's net income for the first three quarters of 2023 declined compared to the same period in 2022, mainly due to the impact of higher costs and reduced demand. Despite these challenges, the company's operating cash flow is expected to support its working capital needs in the coming months.

Source documents

Form 10-Q  filed on Nov 07, 2023
88 pages scanned

Reference data

Company financials Q3 revenue 7.9M
Analyst estimates Q3 EPS missed by NaN%
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