Guess which ASX 200 stock is surging 13% after solid half-year result

This stock is charging higher after investors responded positively to its results release.

| More on:
A man has a surprised and relieved expression on his face. as he raises his hands up to his face in response to the high fluctuations in the Galileo share price today

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

ARB Corporation Ltd (ASX: ARB) shares are having a stunning session.

In morning trade, the ASX 200 stock has jumped 13% to a 52-week high of $40.43.

This follows the release of the 4×4 automotive parts company's half-year results.

ASX 200 stock jumps on results

  • Sales revenue up 0.1% to $341.5 million
  • Profit after tax up 8.1% to $51.3 million
  • Interim dividend up 6.3% to 34 cents per share

What happened during the half?

For the six months ended 31 December, ARB reported a modest 0.2% lift in sales revenue to $342.7 million.

The ASX 200 stock's sales would have been stronger, but its Aftermarket sales were significantly hindered during the second quarter by industrial disputes across Australian ports. This resulted in extensive inbound and outbound disruptions. Australian Aftermarket were up 3.7% over the prior corresponding period.

Management advised that it continues to implement initiatives to improve its fitting capacity and alleviate constraints.

ARB's Export sales fell by 13.6% during the period after strong sales growth in the UK was offset by challenging market dynamics in other key international markets.

Finally, sales to original equipment manufacturers (OEM) increased by 53.8% over the period. This is attributable to increased volume from existing contracts, new vehicle model launches, and vehicle availability.

The ASX 200 stock's profits grew quicker than its sales thanks to margin improvements. ARB reported an 8.1% increase in profit after tax to $51.3 million. This allowed the company's board to increase its dividend by 6.3% to 34 cents per share.

Outlook

The good news is that the second half has started very positively. Management revealed that sales in the month of January were strong with the resolution of Australian port disruptions and management initiatives contributing positively to accessory fitting capacity.

In addition, it advised that it maintains a positive outlook despite continued uncertain economic conditions, particularly in the global environment. It concludes:

The company has a strong customer order book, strengthening partnerships and opportunities with OEMs and new and innovative products to be released to market during 2024. The Company's distribution network continues to expand to meet higher customer demand as the supply of new vehicles around the world increases. The Board believes ARB is well positioned to achieve on-going long-term success in Australia and internationally, with strong brands around the world, loyal customers, very capable senior management and staff, a strong balance sheet and growth strategies in place.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended ARB Corporation. The Motley Fool Australia has recommended ARB Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Earnings Results

Two men sit side by side on a couch with video game controls in their hands and expressive looks on their faces as they react to the action in front of them in a home setting.
Earnings Results

Guess which ASX 200 stock is surging 11% on an 'outstanding' result

This ASX gaming giant just posted a 17% jump in profits, and its shareholders are basking in the glory.

Read more »

Agricultural ASX share price on watch represented by farmer in field looking at tablet computer.
Earnings Results

Graincorp share price lifts off as dividend is maintained and debts plunge

ASX 200 investors are bidding up the Graincorp share price today. But why?

Read more »

Smiling elderly couple looking at their superannuation account, symbolising retirement.
Earnings Results

Why is this ASX 200 stock avoiding the market selloff and pushing higher?

Not all shares are falling with the market on Thursday.

Read more »

A woman wearing yellow smiles and drinks coffee while on laptop.
Bank Shares

CBA share price on watch following $2.4b third quarter profit

CBA delivered another bumper profit for the three months.

Read more »

A happy male investor turns around on his chair to look at a friend while a laptop runs on his desk showing share price movements
Earnings Results

ANZ share price on watch amid first-half earnings beat and $2b buyback

The banking giant appears to have outperformed expectations during the half.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Earnings Results

Westpac shares charge higher on half-year earnings beat and buyback

Investors are loving this bank's half-year results release. But why?

Read more »

Contented looking man leans back in his chair at his desk and smiles.
Earnings Results

Westpac share price on watch amid results, special dividend and $1b buyback

This banking giant is rewarding its shareholders handsomely this half.

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Technology Shares

Why is the Block share price rocketing 10% on Friday?

This payments company outperformed expectations during the first quarter.

Read more »