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ROGERS CORP (ROG)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 results landed at the midpoint of guidance: net sales $192.2M, gross margin 32.1%, adjusted EPS $0.46; GAAP EPS was $(0.03) driven by restructuring and mix pressure .
  • Sequential softness from completion of India wireless program and seasonal decline in portable electronics; EMS and AES both down q/q, while A&D improved; FX added ~$0.6M q/q to sales .
  • Management set Q1 2025 guidance as the likely low point: net sales $180–$195M, gross margin 29.0%–30.5%, GAAP EPS $(0.26) to $0.04, adjusted EPS $0.10–$0.40, including ~$0.25 restructuring costs tied to Belgium wind-down; FY25 CapEx cut to $40–$50M .
  • Street consensus from S&P Global was unavailable at time of analysis due to data limits; comparison vs estimates is therefore not provided; management emphasized “results in line with expectations,” with H2 2025 recovery narrative (EV/HEV curamik, portable electronics seasonality, China capacity ramp) as potential stock catalysts .

What Went Well and What Went Wrong

What Went Well

  • Cost actions and operational excellence mitigated volume pressure: adjusted operating margin 4.7% and adjusted EBITDA margin 12.1% despite lower sales; free cash flow $18.3M in Q4 and $71.0M for 2024; ending cash $159.8M; no debt outstanding .
  • A&D momentum: “Aerospace & Defense delivered solid growth for a second consecutive quarter,” with mid-single-digit growth outlook; RF solutions strength in military radar applications .
  • Strategic footprint progress: new curamik AMB power substrate factory in China on track for mass production mid-2025; “local-for-local” mitigates tariff risk and supports Western and Chinese customers .

What Went Wrong

  • Sequential revenue decline (-8.6% q/q) as India wireless shipments ended and portable electronics seasonality hit; AES down ~8.7% (wireless), EMS down ~8.4% (industrial/portable) .
  • Margin compression: gross margin fell ~310 bps q/q to 32.1% on lower volumes and unfavorable mix; under-absorbed fixed costs as company remained positioned for demand recovery .
  • Restructuring and impairment drove GAAP loss: Q4 restructuring & impairment charges of $16.3M; GAAP operating margin -2.6%; includes ERP impairment ($8M) and Belgium wind-down costs; JV gain ($7.7M) partially offset .

Financial Results

Headline P&L and Profitability

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$204.6 $210.3 $192.2
Gross Margin %32.9% 35.2% 32.1%
Operating Margin % (GAAP)14.9% 6.9% -2.6%
Net Income ($USD Millions)$23.2 $10.7 $(0.5)
Net Income Margin %11.3% 5.1% -0.3%
Diluted EPS (GAAP) ($)$1.24 $0.58 $(0.03)
Adjusted EPS ($)$0.60 $0.98 $0.46
Adjusted Operating Margin %6.3% 11.7% 4.7%
Adjusted EBITDA ($USD Millions)$23.4 $35.2 $23.3
Adjusted EBITDA Margin %11.4% 16.7% 12.1%
Free Cash Flow ($USD Millions)$49.4 $25.2 $18.3

Segment Net Sales

Segment ($USD Millions)Q2 2024Q3 2024Q4 2024
Advanced Electronics Solutions (AES)$115.5 $112.2 $102.4
Elastomeric Material Solutions (EMS)$94.7 $94.2 $86.3
Other$4.0 $3.9 $3.5

KPIs and Cash

KPIQ2 2024Q3 2024Q4 2024
Net Cash Provided by Operating Activities ($M)$22.9 $42.4 $33.7
Capital Expenditures ($M)$14.1 $17.2 $15.4
Free Cash Flow ($M)$8.8 $25.2 $18.3
Cash and Cash Equivalents ($M, period-end)$119.9 $146.4 $159.8
Share Repurchases ($M)——$12 in Q4; $20 FY24
Debt OutstandingRevolver repaid in Q1; no debt No debt No debt

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance / ActualChange
Net Sales ($M)Q4 2024$185–$200 Actual $192.2 Within range
Gross Margin %Q4 202431.5%–33.0% Actual 32.1% Within range
GAAP EPS ($)Q4 2024$(0.15) to $0.15 Actual $(0.03) Within range
Adjusted EPS ($)Q4 2024$0.30–$0.60 Actual $0.46 Within range
Net Sales ($M)Q1 2025—$180–$195 New
Gross Margin %Q1 2025—29.0%–30.5% New
GAAP EPS ($)Q1 2025—$(0.26) to $0.04 New
Adjusted EPS ($)Q1 2025—$0.10–$0.40 New
EPS adjustments detailQ1 2025—Includes ~$0.25 restructuring; ~$0.11 intangible amortization New
Tax RateFY 2025—~27% New
Capital Expenditures ($M)FY 2024 vs FY 2025$50–$60 (FY24) $40–$50 (FY25) Lowered

Earnings Call Themes & Trends

TopicQ2 2024 (Q-2)Q3 2024 (Q-1)Q4 2024 (Current)Trend
EV/HEV (curamik vs EMS)EMS battery solutions record; curamik down on inventory Ceramic down >35% y/y; EMS EV/HEV strong but softened; design wins incl. 800V SiC Modest sequential EV/HEV improvement; customers expect gradual 2H25 recovery Stabilizing; recovery second half 2025
Portable ElectronicsStronger q/q; mix aided margins Seasonal peak but below outlook at one OEM Seasonal decline; content strong in high-end AI devices Seasonal; awaiting AI features to drive high-end demand
Wireless InfrastructureHigher q/q Strong; India project concluded in Q3 Largest q/q decline as India shipments completed Project-driven; near-term headwind
Aerospace & DefenseSlightly lower; diversified Good growth led by AES; mid- to high-single-digit for 2024 Solid growth for second consecutive quarter; mid-single-digit long-term Positive, building base
IndustrialLower demand; macro weakness Still below prior year; PMIs in contraction; targeting BESS, medical, data centers Sequentially lower; year-end inventory mgmt; demand not yet improved Weak; selective opportunities
Tariffs/macro & footprint—Trade and macro headwinds noted “Local-for-local” footprint to mitigate tariffs; 44% Asia sales mix Mitigation in place
R&D/Product launches—New copper-clad laminate in Q4; next-gen radar solutions New ADAS laminate; EMS PORON for semis; thermal/vibration mgmt, signal integrity focus Active pipeline
AI/Data centers—Early-stage AES projects for AI data centers (thermal, signal integrity) Early-stage work continued; EMS adhesives in server power supplies Emerging opportunity

Management Commentary

  • “Our results were consistent with our guidance expectations for the fourth quarter…sales declined due to seasonally lower portable electronics…and lower wireless infrastructure and industrial revenues…cost savings and throughput improvements helped mitigate the effect of lower sales on gross margins.” — Colin Gouveia, CEO .
  • “We expect Q1 to be the low point…Q1 sales $180–$195M; gross margin 29%–30.5%; adjusted EPS $0.10–$0.40; includes $0.25 of restructuring-related expenses…full-year tax rate ~27%.” — Laura Russell, CFO .
  • “Local-for-local manufacturing strategy…can make products in Asia to supply Asia and similarly in North America/Europe…mitigates current and potential future tariffs.” — CEO .
  • “New curamik power substrate factory…customer qualifications wrapping up around mid-’25…full run-rate benefit in 2026; $7–$9M annual operating profit improvement from Belgium wind-down.” — CEO .

Q&A Highlights

  • Q1 segmentation and softness: Portable electronics down seasonally; curamik remains primary y/y headwind; Q1 low point with caution on trade policy and recovery timing .
  • Year-over-year growth timing and cost actions: Expect stronger H2 2025 on curamik recovery, portable seasonality, China capacity; FX headwinds temper growth; ongoing self-help on costs .
  • Margin dynamics: Q4 margin dilution from lower volumes/mix; Q1 headwind from new silicon line ramp/underutilization; margins recover with volumes .
  • A&D trajectory: Solid base business across EMS and RFS; mid-single-digit growth expected near/medium/long term .
  • Tariffs/macro: Footprint diversification enables regional supply; monitoring geopolitics daily; customer caution tied to macro uncertainty .

Estimates Context

  • S&P Global (Capital IQ) consensus for Q4 2024 revenue and EPS was unavailable due to daily request-limit constraints at time of retrieval; therefore, no vs-consensus comparison is provided. Results were “in line with guidance,” with all headline metrics near guidance midpoints .
  • Where estimates are required for future updates, we will re-query S&P Global once access is restored to quantify beats/misses and identify estimate revision risk.

Key Takeaways for Investors

  • Q4 printed within guidance amid volume/mix headwinds; operational savings and disciplined opex limited margin pressure, supporting cash generation and ending cash of $159.8M with no debt .
  • Near-term setup cautious: Q1 2025 likely trough on seasonal portable and underutilization from new line ramp; watch gross margin vs 29–30.5% guide and restructuring flow-through (~$0.25 EPS impact) .
  • H2 2025 recovery narrative credible: curamik inventory normalization, portable electronics seasonality, and China AMB capacity qualification; monitor customer ramps and FX headwinds that could temper growth .
  • Strategic footprint reduces tariff risk and supports China/W. customer expansion; the Belgium wind-down and footprint optimization target $7–$9M annual OP uplift, largely realized late 2025 and full-run-rate in 2026 .
  • A&D remains a durable growth vector, with mid-single-digit trajectory and program wins in RFS; this can offset cyclical industrial/EV/HEV volatility .
  • Capital allocation remains balanced: FY25 CapEx cut to $40–$50M as China expansion completes; opportunistic buybacks executed ($12M in Q4; $20M FY24) with clean balance sheet to pursue bolt-on M&A .
  • Watch narrative catalysts: confirmation of EV/HEV demand recovery timing, portable AI handset content uplift, India wireless follow-on phase, and margin recapture with volume—key drivers of estimate revisions and stock reaction .