Methode Electronics (MEI) Up On Q3 Earnings And Revenue Beat
Zacks Investment Research | Mar 05, 2020 10:26PM ET
Shares of Methode Electronics, Inc. (NYSE:MEI) rallied more than 2% on Mar 5 after the company reported better-than-expected third-quarter fiscal 2020 results. The company’s third-quarter non-GAAP earnings of $1.05 surpassed the Zacks Consensus Estimate of 92 cents and increased 26.5% from the year-ago period.
This year-over-year growth mainly resulted from higher revenues, efficient cost management, and lower interest expenses, partially offset by increased taxes.
Quarter in Detail
Methode’s quarterly revenues grew 15.8% year on year to $285.9 million, beating the consensus mark by 1.7%. The company’s top line mainly benefited from higher sales in the Automotive segment.
Methode’s Automotive revenues grew 21.6% year over year mainly driven by higher sales volumes of integrated center stack and human-machine interface assembly products. Additionally, incremental sales of Grakon’s automotive lighting products contributed to the company’s overall sales growth.
Industrial segment’s revenues edged down 0.2% year over year, as the benefit of higher sales of busbar products was more than offset by lower sales of Grakon and radio remote control products. Negative impact of unfavorable foreign currency-exchange rates also hurts the division’s sales.
The Methode Interface segment's revenues increased 8.8%, chiefly on higher sales volumes of legacy data-solution products. The Medical division’s revenues also grew marginally on increased product acceptance.
Operating results
Methode’s non-GAAP gross margin expanded 10 basis points (bps) year over year to 27.8%. Increased sales at automotive segment and higher sensor products volumes primarily drove gross margin during the reported period. However, unfavorable currency-exchange rates and lower sales of radio remote control and appliance products partially offset the aforementioned benefits.
Methode Electronics, Inc. Price, Consensus and EPS Surprise
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