Tuesday, Littelfuse, Inc.(LFUS), a manufacturer of circuit protection devices, lifted its sales outlook for the second quarter above analysts' estimates, due to more than expected sales at its automotive and electronics units. However, the company said it expects to report a loss for the second quarter largely due to restructuring charges.
Sales for the second quarter of 2009 are now expected to be about $101 million, up 20% compared to the first quarter of 2009. Three Street analysts currently expect the company to report sales of $94.97 million for the quarter.
Earlier, for the second quarter the company expected sales in the range of $93 million to $97 million, which represents 10% - 15% sequential growth over the first quarter.
The company said "Automotive and electronics sales improved more than expected in the second quarter, and electrical sales increased in line with normal seasonality,"
For the second quarter, on a GAAP basis, the company expects to report a loss of $0.12 to $0.14 per share, which includes restructuring charges of about $7 million, pre-tax, or $0.22 per share. Currently, on average, four analysts polled by Thomson Reuters expect the company to report breakeven per share for the quarter. Analysts' estimates typically exclude special items.
These restructuring charges are related to plans announced on May 19 to further consolidate manufacturing sites and further reduce operating expenses. The restructuring activities, which are expected to begin in the third quarter of 2009 and be fully completed by the end of 2010, are expected to produce annual savings of about $7 million.
Under its restructuring plans, the company intends to negotiate with the workers' council to transfer manufacturing from its Duensen, Germany site to Mexico. The company also plans to negotiate closure of a company-owned distribution center in the Netherlands and distribute products in Europe through a third-party logistics provider.
Littelfuse said it will consolidate its Taiwan wafer fabrication facility into Wuxi, China. The company is also planning to consolidate certain support activities into its existing low-cost sites, and implement other workforce reductions due to functional realignment and job elimination. The company had said earlier that it expects to book restructuring charges of about $5 million to $8 million pre-tax over the next several quarters related to these restructuring activities.
Gordon Hunter, chief executive officer, Littelfuse said, "With the cost reductions that have been implemented, the current sales run-rate is well above our breakeven point, excluding restructuring charges. While most end markets are still weak, channel inventories have declined considerably and we are now into the traditionally stronger part of the year."
The company plans to release financial results for the second quarter on July 29.
LFUS closed Monday's regular trading at $20.13.
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