Had your fill of depressing news on the U.S. auto industry? Not yet? Well, you're in luck. You can kick off tomorrow with the latest news from aluminum wheel maker Superior Industries (NYSE:SUP). The company reports Q4 and full-year 2005 results before the opening bell.

Wall Street Wisdom:

  • General consensus. Here's something that could set a contrarian investor's heart to racing: 11 analysts follow Superior, but only one of them rates the stock a buy. Two analysts hedge with hold ratings, but everyone else is firmly in the bears' camp.
  • Revenues. Superior's sales sagged in Q4. Analysts are looking for a 5% drop year over year to $222.6 million.
  • Earnings. Profits are believed to have fallen by more than half, down from last year's $0.45 to $0.22 per share.

Margin watch:
None of this will come as news to auto industry watchers -- or margin watchers, either. Over the past 18 months, we've seen Superior's gross margins cut in half, seen two-thirds lopped off the operating margins, and watched the net fall by 58%. With auto-parts buyers like GM (NYSE:GM) and Ford (NYSE:F) perpetually on the ropes, and more and more peer auto-parts makers filing for bankruptcy protection, as Dana (NYSE:DCN) and Delphi recently did, analyst expectations of continued bad news from Superior should surprise no one.

Margins %

6/04

9/04

12/04

3/05

6/05

9/05

Gross

11.9

10.9

9.1

8.2

6.5

5.5

Op.

10.2

9.3

7.2

6.2

4.5

3.4

Net

6.9

6.2

5.0

4.5

3.6

2.9

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ending in the named months.

Foolish lookout:
It's at times like these that Fools would do well to remember the old saw: "It's always darkest before the dawn." Yes, Superior's situation looks bleak. No, I don't expect to see any let-up in the bad news tomorrow. However, on the other hand, it's not quite time for Superior final rites yet. In a miserable business environment for its industry, the firm still managed to generate $3 million in free cash flow over the past year. As long as it can keep some positive cash flow going, there's no reason to consign this company to the scrap heap.

One of these days, the auto industry is going to turn around -- that's the nature of cyclical industries. If Superior's still standing when that happens, there are going to be some very upset "investors" among the persons who've sold 40% of this company's shares short.

Fool contributor Rich Smith does not own shares of any company named above.