Methode Electronics, Inc. MEI reported a second-quarter FY24 net sales decline of 8.8% year-on-year to $288 million, missing the consensus of $292.82 million.
Methode was ailed by lower Automotive segment sales in all geographic regions, which marred quarterly performance.
Adjusted EPS of $0.06 missed the consensus of $0.12. The impact of the UAW strike on earnings was $0.03 per share.
Segments: Automotive segment's net sales were $154.3 million, down from $196.9 million. Net sales for the Industrial segment were $120.4 million, up from $103.8 million.
Sales at the Interface segment were $11.7 million, down from $14.1 million. The medical segment's net sales were $1.6 million, up from $1.1 million.
Gross profit fell 29.4% Y/Y to $52.3 million. Adjusted EBITDA was $21.2 million, significantly lower than $46.6 million in the same quarter a year ago.
The company exited the quarter with cash and equivalents totaling $122.5 million. Long-term debt was $329.0 million at the end of the quarter.
Outlook: For Q3, the company expects net sales to be similar to the second quarter and adjusted EPS to be modestly higher sequentially.
For FY24, the company reiterates net sales of $1.14 billion-$1.18 billion versus the $1.16 billion estimate. For FY24, adjusted EPS forecast is cut from $0.88-$1.08 to $0.24-$0.50 versus the $0.92 estimate.
For FY25, the company now expects net sales of $1.15 billion-$1.25 billion compared to the previous range of $1.25 billion-$1.35 billion. The lower range is mainly due to expected customer delays with EV programs and program roll-offs.
The company has also revised income from operations as a percentage of net sales to 6%-8%, as compared to the previous range of 11%-12%.
Price Action: MEI shares are trading lower by 10.8% to $21.76 on the last check Thursday.
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