Q2 2024 Earnings Summary
Reported on Feb 18, 2025 (After Market Close)
Pre-Earnings Price$267.11Last close (Jul 31, 2024)
Post-Earnings Price$265.34Open (Aug 1, 2024)
Price Change
$-1.77(-0.66%)
- Passive electronics inventory destocking is largely behind, with inventory levels for passive products back to pre-COVID levels, positioning Littelfuse for a return to growth in the electronics segment. This normalization may lead to improved demand and sales going forward. ,
- Foundational work to improve margins has been completed, and as volumes return, Littelfuse expects strong incremental margin expansion, historically experiencing very strong incrementals coming out of cycles. This suggests potential for significant profitability improvements as the market recovers. ,
- Strategic investments in long-term growth opportunities, such as the acquisition of the Dortmund fab, are on track. This will support their power semiconductor products, particularly for industrial applications, enhancing their capacity for future growth. The acquisition is expected to close at the end of this year or beginning of next year, with a multiyear transition plan in place. ,
- Dilutive Impact on Margins from Fab Transition: Littelfuse anticipates a dilutive effect on operating margins over the next 4-5 years due to the transition of their newly acquired fab in Germany. As they continue to manufacture automotive products for the seller with lower-than-typical margins, this arrangement will negatively impact segment margins.
- Softness in Industrial Markets and End Demand: The company is experiencing ongoing softness in industrial markets, including EV charging and solar installations, which have been strong drivers historically but are now soft. This softness may impact growth and profitability in these segments.
- Cautious Outlook Due to Weak End Markets: Littelfuse has expressed caution for the third quarter due to softer markets in light industrial applications, OEM and channel destocking, and order pushouts and delays from customers. Additionally, there is cautiousness in the automotive sector with car builds coming down, particularly in North America and Europe.