LONDON, UK / ACCESSWIRE / January 09, 2018 / Active-Investors.com has just released a free earnings report on Methode Electronics, Inc. (NYSE: MEI) ("Methode"). If you want access to this report all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=MEI. Methode reported its second quarter fiscal 2018 on December 07, 2017. The maker of electrical components for the auto and computer industries' sales topped market expectations while earnings were in-line expectations. Register today and get access to over 1000 Free Research Reports by joining our site below:
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Active-Investors.com is focused on giving you timely information and the inside line on companies that matter to you. This morning, Methode Electronics most recent news is on our radar and our team decided to put out a fantastic report on the company that is now available for free below:
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Earnings Highlights and Summary
Methode's Q2 FY18 net sales advanced 9.9% to $230.1 million from $209.3 million in Q2 FY17. The Company stated that y-o-y currency rate fluctuations increased net sales $2.4 million. The Company's reported quarter included net sales from new acquisitions in the Automotive segment of $7.0 million from Pacific Insight and $9.1 million from Procoplast. Methode's sales topped analysts' expectations of $216 million.
Methode's consolidated gross margins as a percentage of sales increased to 26.9% in Q2 FY18 compared to 26.6% in Q2 FY17. Gross margins improved primarily as a result of higher sales, partially offset by pricing reductions, unfavorable currency impact on labor, and other factory expenses in the Automotive and Interface segments, purchase accounting adjustments, unfavorable commodity pricing of raw materials and increased investment in Dabir.
For Q2 FY18, Methode's selling and administrative expenses as a percentage of sales increased to 13.6% compared to 12.4% in Q2 FY17. The Company's selling and administrative expenses increased 20.5% to $31.2 million in the reported compared to $25.9 million in the prior year's corresponding quarter due primarily to acquisition-related expense and additional selling and administrative expenses from acquisitions.
During Q2 FY18, Methode's net income decreased $0.7 million to $24.2 million, or $0.64 per share, compared to $24.9 million, or $0.66 per share, in Q2 FY17. The Company's earnings met Wall Street's estimates of $0.64 per share.
Methode Electronics' Segment Comparisons
During Q2 FY18, the Automotive segment's net sales improved 13.7% on a y-o-y basis, attributable to a 54.5% sales increase in Europe due to sales from Procoplast, higher customer-funded tooling and design fees, favorable currency impact and higher hidden switch, and sensor product volumes; and a 5.5% sales improvement in North America, due to sales from Pacific Insight and increased user interface product volume. The segment's gross margins as a percentage of sales declined slightly to 28.3% from 28.6% due to pricing reductions, purchase accounting adjustments/ and unfavorable currency impact. For Q2 FY18, the Automotive segment's income from operations improved 11.7% on a y-o-y basis, on the back of from higher sales, partially offset by acquisition-related costs, purchase accounting adjustments, increased intangible asset amortization expense, pricing reductions, and unfavorable currency impact.
During Q2 FY18, the Interface segment's net sales decreased 10.8% on a y-o-y basis, attributable to a 42.9% sales decline in Asia due to lower legacy product volume; and a 16.8% sales decrease in North America driven mainly by the exit of Connectivity at the end of FY17 as well as lower radio remote control product volume. The segment's gross margins as a percentage of sales improved to 22.1% from 19.1% in the year earlier same quarter due to increased radio remote control product volumes. For Q2 FY18, the Interface segment's income from operations increased to $1.8 million from a loss of $0.4 million in Q2 FY17, due to lower legal and other selling expenses.
During Q2 FY18, the Power Products segment's net sales advanced 15.2% on a y-o-y basis, attributable to a 158.3% sales improvement in Europe driven by higher bypass switch product volume; and a 5.4% sales growth in Asia due to higher PowerRail® and other busbar product volumes. The segment's gross margins as a percentage of sales increased to 26.4% from 24.0% due to higher sales. The Power Products division's income from operations improved 42.9% as the result of increased sales as well as lower travel and other selling expenses.
Guidance
Methode updated its sales fiscal 2018 guidance to the range of $880 million to $900 million from $807 million to $827 million, primarily due to incremental sales from acquisitions, but maintained pre-tax income from operations in the range of $114 million to $127 million and earnings per share in the range of $2.43 to $2.63.
Stock Performance Snapshot
January 08, 2018 - At Monday's closing bell, Methode Electronics' stock marginally advanced 0.36%, ending the trading session at $41.40.
Volume traded for the day: 163.42 thousand shares.
Stock performance in the previous six-month period – up 3.24%; past twelve-month period – up 0.85%; and year-to-date – up 3.24%
After yesterday's close, Methode Electronics' market cap was at $1.55 billion.
Price to Earnings (P/E) ratio was at 16.97.
The stock has a dividend yield of 1.06%.
The stock is part of the Technology sector, categorized under the Diversified Electronics industry. This sector was up 0.4% at the end of the session.
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