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Oct 28, 2023
Methode Q2 2024 Earnings Report
Methode reported a net loss for Q2 2024, impacted by goodwill impairment and operational inefficiencies, though sales remained solid.
Key Takeaways
Methode Electronics reported a net sales of $288.0 million for the second quarter of fiscal year 2024. The company experienced a net loss of $55.3 million, or $1.55 per diluted share, but adjusted net income was $2.4 million, or $0.06 per diluted share. The results were impacted by auto program roll offs, a difficult comparison in Asia, softness in the e-bike market, and the UAW strike.
Net sales reached $288.0 million.
Electric and hybrid vehicle applications accounted for 19% of net sales.
The company recorded a goodwill impairment of $56.5 million in North American and European Automotive Reporting Units.
A net loss of $55.3 million, or $1.55 per diluted share, was reported; adjusted net income was $2.4 million, or $0.06 per diluted share.
Methode
Methode
Methode Revenue by Segment
Revenue by Segment
Automotive Revenue
CapyFin.comIndustrial Revenue
CapyFin.comInterface Revenue
CapyFin.com Forward Guidance
For the third quarter of fiscal 2024, Methode expects net sales to be similar to the second quarter and adjusted diluted earnings per share to be modestly higher. For the full fiscal year 2024, the company anticipates net sales in the range of $1,140 to $1,180 million and adjusted diluted earnings per share in the range of $0.24 to $0.50.
Positive Outlook
- Net sales expected to be similar to the second quarter.
- Adjusted diluted earnings per share expected to be modestly higher than the second quarter.
- Full year net sales expected to be in a range of $1,140 to $1,180 million.
- Adjusted diluted earnings per share are now expected to be in a range of $0.24 to $0.50.
- Guidance is subject to change due to a variety of factors including the successful launch of multiple new programs, the ultimate take rates on new EV programs, successful cost recovery actions, inflation, global economic instability, supply chain disruptions, potential restructuring efforts, and potential impairments.
Challenges Ahead
- Revised diluted earnings per share to be in a range of -$1.40 to -$1.14, down from the previous range of $0.80 to $1.00.
- Goodwill impairment impacts earnings.
- Operational inefficiencies contribute to lower earnings.
- Product mix affects earnings.
- EV market trends are tempering expectations for fiscal year 2025.
Revenue & Expenses
Visualization of income flow from segment revenue to net income