Littelfuse Accelerated Growth and Lifted Its Outlook
Adjusted earnings rose 47% to $4.19 a share, topping the company’s prior forecast.
Littelfuse (LFUS), the electronic-components maker, reported a 20.4% increase in second-quarter sales as organic growth accelerated and margins widened.
Sales reached $738.8 million, up from $613.4 million a year earlier and about 12% from $656.9 million in the first quarter. Organic growth strengthened to 14% from 9% in the prior quarter, extending a rebound that began late last year.
The results exceeded Littelfuse’s forecast on both the top and bottom lines. Sales finished $28.8 million above the high end of its guidance, while adjusted earnings beat the top of the projected range by $0.34 a share. GAAP earnings increased to $3.49 a share from $2.30 despite $20.0 million of restructuring, impairment and other charges.
Profitability improved as gross margin expanded to about 41.4% from 37.8% a year earlier. Adjusted operating margin widened to 19.0% from 15.8%, while adjusted EBITDA margin rose to 23.6% from 21.4% and improved from 22.9% in the first quarter.
Electronics led the advance, with organic sales growth accelerating to 20% from 15% in the first quarter. Passive-product sales increased 26% organically and semiconductor sales rose 15%, helping lift the segment’s adjusted EBITDA margin 470 basis points to 26.3%.
Industrial sales rose 52%, including 36 percentage points from the Basler acquisition. Organic growth strengthened to 16% on demand from data centers, HVAC, industrial automation and construction. Transportation remained the weakest segment, with sales up 2% and adjusted EBITDA margin falling 190 basis points to 18.6% as auto-sensor sales declined.
For the third quarter, Littelfuse projects sales of $780 million to $800 million and adjusted earnings of $4.85 to $5.05 a share. The outlook calls for about 26% revenue growth and includes contributions from Basler.
Free cash flow rose 75% to $127.3 million and nearly doubled from the first quarter, giving Littelfuse additional cash generation as it raised its quarterly dividend 7% to $0.80 a share.