There's something to be said for the power of lowered expectations.
When automobile wheelwright Superior Industries
The news wasn't bad. Yes, wheel shipments were down 9% and, yes, gross margins shrank as well (ouch), but Superior was able to at least pass on some of their increased costs to customers. Hey, I only said it wasn't all bad.
Moreover, the quarter's decline in units shipped was smaller than the year's 12% slide. Similarly, the rise in revenue was better than the year's 2% decline in revenue. Hardly news to inspire back flips, but at this point, expectations have gotten so low that it was apparently good enough.
Investors have gotten so apathetic over Superior that even unexpected bad news doesn't seem to faze them anymore. Ordinarily, when you think of the stock options backdating scandal, highfliers like Apple
In an SEC NT-10K filing with the SEC just before earnings, the company advised that because of shareholder allegations (in the form of lawsuits) that certain company officials backdated their stock options, Superior needs to conduct an investigation. While so doing, it cannot finalize its 10-K filing, and so has been forced to delay its submission.
That's a real shame, because it means we're forced to rely on the exceedingly skimpy "balance sheet" summary that Superior included in its earnings release. Lumping together such important metrics as inventories and accounts receivable with all other "current assets," it's impossible for us to determine at this time just how well Superior is collecting on its debts and managing its working capital. All we really know is that current assets today are 4% lower than they were a year ago.
That sounds like good news, sure. But as Superior investors know, it's much safer to keep your expectations low.
Find further Superior analysis in:
- Foolish Forecast: Superior Forecasting
- Foolish Forecast: Superior Guesstimates
- Foolish Forecast: Superior Regularity