Loading...
•
Sep 30, 2021
Preformed Line Products Q3 2021 Earnings Report
Preformed Line Products' third quarter results decreased compared to the same period last year due to rising raw material and transportation costs, increased employee compensation, and warranty expenses, despite a sales increase.
Key Takeaways
Preformed Line Products reported a 6.2% increase in net sales for Q3 2021, reaching $135.4 million, but net income decreased to $10.7 million, or $2.15 per diluted share, compared to $13.0 million, or $2.59 per diluted share, in Q3 2020, impacted by rising costs and expenses.
Net sales for Q3 2021 increased by 6.2% to $135.4 million compared to $127.5 million in Q3 2020, with a favorable currency impact of $2.0 million.
Net income for Q3 2021 was $10.7 million, or $2.15 per diluted share, down from $13.0 million, or $2.59 per diluted share, in Q3 2020.
Increased raw material prices, transportation costs, employee compensation, and warranty expenses negatively impacted net income for the quarter.
A price increase by PLP-USA, effective June 1, 2021, had a moderate effect in offsetting increased costs due to an elevated order backlog.
Preformed Line Products
Preformed Line Products
Forward Guidance
PLP-USA announced a second price increase effective October 15, 2021, which is expected to mitigate the earnings impact of cost inflation in Q4 2021 and beyond, although continued inflation may require further price adjustments.
Positive Outlook
- Second price increase effective October 15, 2021, expected to mitigate earnings impact of cost inflation.
- Anticipation of improved earnings impact in Q4 2021 and beyond due to price increases.
- PLP-USA leading net sales increase driven by growth in the communications product family.
- Geographic diversification continues to de-risk the business model.
- Focus on employee safety and well-being while providing high-quality products and services.
Challenges Ahead
- Inflation on raw material commodities and significant increase in transportation costs create challenges.
- Continued cost inflation may offset gains from price increases and require further adjustments.
- Headwinds seen in the Asia-Pacific region from the deferral of infrastructure projects due to COVID-19.
- The extent to which COVID-19 will impact future operations is unknown.
- Uncertainty in business conditions and economy due to COVID-19.