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Q3 Earnings Preview for Littelfuse (NasdaqGS:LFUS)

in EARNINGS/INVESTING IDEAS by

Littelfuse, Inc. (NasdaqGS:LFUS) is scheduled to report Q3 earnings results before markets open for trading on October 28, 2020.

The company is expected to report earnings of $1.17/share on revenue of $354 million. The consensus earnings per share (EPS) of $1.17/share is based on a poll of 7 analysts and represents a decline in eps of −34.2% over the same quarter last year, when the company reported earnings of $1.78/share.

The revenue forecast of $354 million based on a poll of 7 analysts implies a year-over-year (YoY) decline in revenue of −2.2%. Last year the company reported $362 million in revenue for the quarter.

Expected to report EPS contraction of −34.2% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $354.05 $361.97 −2.2%
EPS $1.17 $1.78 −34.2%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, missed 1 quarters, and met expectations 1 quarters.

What are your expectations from Littelfuse, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.39 $0.71 83.6% Beat
Q1, 2020 $0.92 $1.29 40.9% Beat
Q4, 2019 $1.15 $1.17 1.6% Beat
Q3, 2019 $1.56 $1.78 14.1% Beat
Q2, 2019 $1.91 $1.91 0.0% Met
Q1, 2019 $1.92 $1.96 2.1% Beat
Q4, 2018 $2 $1.87 −6.7% Missed
Q3, 2018 $2.40 $2.49 4.0% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 27, 2020, the stock price reacted by increasing 3.3%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 29, 2020 $172.11 $177.72 3.3% Increase
April 29, 2020 $142.91 $145.24 1.6% Increase
January 29, 2020 $186.77 $183.02 −2.0% Decline
October 30, 2019 $189 $175.57 −7.1% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.03, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.03 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Littelfuse, Inc. is currently trading at $195.98/share, down −3.3% for the day. The company is trading at approximately 96.0% of its 52-week high of $204.15/share. The company’s stock price is up 10.3% since the last earnings report and up 1.6% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 61.50 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:LFUS Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 64.51 and a forward P/E multiple of 46.96.

Littelfuse, Inc.’s current share price also implies a price-to-book (P/B) multiple of 3.26. The following table summarizes some other key fundamental ratios:

Data as of October 26, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 27, 2020
Stock Price (Current) $195.98
P/E Ratio 64.5x
P/E Ratio (Fwd) 47.0x
PEG Ratio −1.2
Total Debt / Total Capital 13.9%
Levered Free Cash Flow $200.4 million
EV / EBITDA 19.0x

Finbox

Littelfuse, Inc. is a mid-cap stock with a market capitalization of $4.77 billion and a total enterprise value of $4.917 billion. The company operates in the Information Technology sector and the Electronic Equipment, Instruments & Components industry.

Littelfuse, Inc. manufactures and sells circuit protection, power control, and sensing products in the Asia-Pacific, the Americas, and Europe. The company’s Electronics segment offers fuses and fuse accessories, positive temperature coefficient resettable fuses, solid state relays, polymer electrostatic discharge suppressors, varistors, magnetic sensing products, gas discharge tubes, and position, fluid, and temperature sensors; and discrete transient voltage suppressor (TVS) diodes, TVS diode arrays, protection and switching thyristors, metal-oxide-semiconductor field-effect transistors, integrated circuits, silicon carbide diodes, and insulated gate bipolar transistors. This segment markets its products to industrial and automotive electronics, electric vehicle and related infrastructure, data and telecommunications, medical devices, alternative energy, consumer electronics, and white goods markets. Its Automotive segment provides blade fuses, battery cable protectors, resettable fuses, and high-current and high-voltage fuses for hybrid and electric vehicles; fuses, switches, relays, and power distribution modules for the commercial vehicle industry; and automotive sensor products to monitor the passenger occupants. This segment serves original equipment manufacturers, Tier-I suppliers, and parts distributors in the passenger car, heavy duty truck, off-road vehicles, material handling, agricultural, construction, and other commercial vehicle end markets. The company’s Industrial segment offers power fuses and holders, protection relays and controls, and other circuit protection products for use in oil, gas, mining, alternative energy, electric vehicle infrastructure, non-residential construction, HVAC systems, elevator, and other industrial equipment applications. It sells its products through distributors, direct sales force, and manufacturers’ representatives. Littelfuse, Inc. was founded in 1927 and is headquartered in Chicago, Illinois.

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