Littelfuse reported record third-quarter sales, sharply higher earnings and strong cash generation, citing broad-based demand and improved margins. The electrical-components maker also forecast roughly 28% year-over-year revenue growth in the fourth quarter, with sales expected to reach $750 million to $770 million.
Reported third-quarter sales were affected by a $28.5 million fee tied to an amendment to a Dortmund contract, which Littelfuse recorded as a reduction in semiconductor sales.
Key details
- Sales and growth: Net sales reached a record $767 million. Organic growth contributed 22%, according to the company.
- Earnings: GAAP diluted earnings per share rose 62% year over year to $4.49. Adjusted diluted EPS, a non-GAAP measure, increased 96% to a record $5.79.
- Margins: GAAP operating margin was 20.0%, up 4.4 percentage points from a year earlier. Adjusted EBITDA margin expanded 6.9 points to 28.4%.
- Cash generation: Cash flow from operations was $230 million, up 57%, while free cash flow was $216 million, up 64%. For the first nine months of the year, operating cash flow totaled $457 million and free cash flow was $409 million, increases of 55% and 66%, respectively.
- Fourth-quarter outlook: Littelfuse expects sales of $750 million to $770 million and adjusted diluted EPS of $5.05 to $5.25. It expects an adjusted effective tax rate of about 24%.
- Management’s outlook: CEO Greg Henderson said the company sees strong demand across its markets and pointed to continued focus on growth opportunities, customer partnerships, operational execution and disciplined capital deployment.
The quarter combined higher reported earnings and margins with substantial cash generation. The $28.5 million contract-amendment fee reduced reported semiconductor sales; the company’s headline sales figure includes that reduction.