Sales for Littelfuse. one of the world’s largest manufacturers of circuit protection components in the June quarter of 2010 were $157.5 million, a 55% increase compared to the second quarter of 2009 and a 9% increase from the first quarter of 2010.
Component sales to the digital electronics segment increased 68% year over year and 17% sequentially due to continued strength across all geographies and end markets.
Component sales to the Automotive segment increased 38% year over year due to strong growth in all regions. As expected, sales declined 8% sequentially due to pipeline fill for programs in China in the first quarter of 2010, a 3% reduction in global car production and decline in the value of the euro.
Component sales to the Electrical end use market segment increased 31% year over year due to continued strong growth for protection relays and steady improvement in power fuse demand. Electrical sales increased 4% sequentially due to seasonal increases in power fuse volume.
Operating margin for the second quarter of 2010 improved to 17.5% compared to 15.0% in the first quarter of 2010 due to operating leverage on higher sales and the beginning of savings from the last phase of manufacturing transfers.
“We are pleased with our performance for the first half of 2010,” said Gordon Hunter, Chief Executive Officer. “We are having success with key organic growth initiatives; we have ramped up production to meet increased demand and maintain competitive lead times; and we remain on track with our manufacturing transfers which are delivering savings on or ahead of schedule. This crisp execution has enabled us to overachieve our 15% operating margin target in the second quarter with significant cost savings yet to come over the next three quarters.”
Outlook: Sales for the third quarter of 2010 are expected to be in the range of $156 to $164 million, which represents over 50% growth year over year, or a sequential growth rate of between -1% to 4% for the September quarter (Reference 2).
Earnings for the third quarter of 2010 are expected to be in the range of $0.92 to $1.04 per diluted share reflecting additional transfer-related savings in the third quarter.
“Even as growth begins to slow in the next few quarters, we are confident that our new cost structure will enable us to continue to deliver superior financial results,” said Hunter.
Additional Resources: (1) Circuit Protection Components: World Market Outlook: 2009-2014 ISBN # 1-893211-84-3 (2009) (2) Circuit Protection Components: World Markets, Technologies & Opportunites: 2008-2013 ISBN # 1-893211-22-3 (2008)