Most IP&E suppliers had a solid September quarter, with many companies reporting higher sales and earnings year over year. While that momentum is thrusting some suppliers into a strong December quarter and end to 2014, other suppliers are more cautious, citing currency fluctuations, lower distributor sales, the effects of previous restructuring efforts, and uncertain economic and political conditions as factors.
With distributor sales a key barometer for many IP&E suppliers’ fortunes, any uptick or downtick in distributor sales has a key effect on the company. For instance, passive component supplier Vishay Intertechnology Inc. (Malvern, PA) expects lower sales in its distribution channels to impact its December quarter. “We anticipate a temporary slowdown of sales to distribution and guide for revenues of $600 million to $640 million at gross margins in line with this volume,” said Gerald Paul, Vishay’s chief executive, in a statement.
Uncertain economic and political events could affect December quarter results, noted Amphenol president and chief executive in its third quarter earnings statement last month.
“In recent months, there has been an increase in geopolitical and market uncertainties around the world. Considering these uncertainties as well as current currency exchange rates including relatively weaker overseas currencies, we expect fourth quarter sales in the range of $1.341 billion to $1.381 billion and diluted earnings per share in the range of 58 to 60 cents.” Amphenol earned $182 million, or 58 cents per share, on sales of $1.35 billion in the third quarter of 2014.
Restructuring also continue to impact company results and outlooks. CTS Corp., which consolidated its Canadian plants earlier this year, is projecting 2014 sales to be at the low end of $400 million to $415 million range and adjusted earnings per share of 96 cents to $1.02.
Circuit protection device manufacturer Littelfuse (Chicago), which earned $1.32 per share on sales of $217.6 million in its third quarter, is projecting sales of $201 million to $211 million in the fourth quarter, which the company said would be up 4% year-over-year. The company will increase capital expenditures by $11 million in the quarter as it transfers some of its U.S. manufacturing to the Philippines.
TE Connectivity, which reported net earnings of $663 million, or 1.02 per share on sales of $3.58 billion in its September quarter, expects earnings per share in its December quarter to range from 88 to 92 cents with net sales of $3.46 billion to $3.56 billion. Despite lower guidance, the company expects a strong upcoming fiscal year.
Tom Lynch, TE Connectivity chairman and chef executive, said in a statement, “For fiscal 2015, we expect to deliver another year of solid sales and earnings growth driven by growth in most of our business. We expect continued solid performance in our Transportation and Industrial segments and Appliances business, TE’s businesses focused on harsh environment applications; and double-digit revenue growth in our Networks segment due to significant project wins in our Subcom business.”
A strong third quarter for interconnection and materials supplier 3M led the company to raise its 2014 expectations. The company now expects 2014 earnings of $7.40 to $7.50 per share, vs. a prior expectation of $7.30 to $7.55 per share. Foreign currency impact will reduce sales by 1.5% for the year vs. a previous estimate of 1 percent.
The article originally published at the IP&E Marketplace.