April 7, 2008 - Superior Industries International, Inc. (SUP-NYSE) plays its own version of "Wheel of Fortune." The company is a leading maker of cast and forged aluminum wheels for passenger cars and light trucks. Superior Industries sells its wheels to such major OEMs as General Motors, Chrysler, and Ford, as well as to Audi, BMW, Isuzu, Daimler, and Toyota. Combined, shipments to GM, Daimler, Chrysler, and Ford account for more than 80% of Superior Industries' sales. The company sold its suspension components business in late 2006 to Saint Jean Industries of France.

The company reported a loss in 2006 of 23 cents a share. Last year, it showed 26 cents in the black. This year analysts are looking for 65 cents to the good and $1.05 next year. Revenues have climbed since 2006, going from $789.9 million to $956.9 million. This year expect $975 million and $1.05 billion next year. Over the next 5 years, analysts think revenues will increase by 6.5% a year on average while earnings grow by 17.5% a year, on average.

Revenues and profits were helped by 2 factors. Higher aluminum prices were no problem. They were passed on directly to customers. Bigger wheels were more popular, ones with larger diameters and higher prices. With better efficiencies in its U.S. plants as well as expansion of production in Mexico, profitability returned. Analysts expect even more efficient production in 2008 and beyond.

Everyone knows the U.S. automakers are in trouble. That makes Superior vulnerable. 80% of its business comes from the "Big" Three, GM, Ford and Chrysler. No one expects the industry to turn around soon. And with the invasion of foreign manufacturers taking more market share every year, these three may face difficult times even when the economy improves.

On top of this concern was the recent restatement of earnings for the years 2003 to 2006. Seems there were accounting errors in those years, related to taxes for the most part. Impact to earnings should be minimal but never a good PR position to have.

More numbers: Chairman Louis Borick and his extended family own about 21% of Superior Industries. There is no debt on the books. Current assets outnumber current liabilities by almost 3 to 1. Net profit margin is 1.5% with expectations of 2.9% next year. There is a dividend of 64 cents, for a yield of 3.1%. The dividends take 100% of the earnings this year but if projections for next year are valid, the percentage drops to 61.

Going forward, it's kind of bumpy. The company's largest buyers are decreasing production. Fewer wheels will be needed. But management has shown it is responding to current times and has increased market share with bigger wheels and higher profit margins. The accounting issues appear to be minor. If you believe the car industry will rebound, you'll want to follow SUP. If you like the stock already and buy it, you'll have a decent dividend to comfort you as you wait for the turn.

- Company Web site: www.supind.com

- Ted Allrich