Littelfuse, Inc. reported sales and earnings for the second quarter of 2007. Sales for the second quarter of 2007 were $129.1 million and diluted earnings per share were $0.37 including restructuring charges of $0.03 per share. The restructuring charges relate primarily to the termination of former-Heinrich sales representatives in Europe and additional Ireland severance.
Adjusted earnings per share for the second quarter of 2007, which excludes the above items, were $0.40. This was consistent with the most recent earnings guidance. The sale of excess land in Ireland, which was previously expected to close in the second quarter, did not close until July 3, 2007. This will add approximately $0.21 to earnings per share in the third quarter.
Sales for the second quarter of 2007 were down 6% compared to the second quarter of 2006, due to lower sales in the Americas and Asia-Pacific regions reflecting weakness in the electronics markets. This was partially offset by growth in electrical and automotive sales. The decline in electronics sales was due in part to the effects of inventory in the channel, which was building in the second quarter of 2006 and declining in the second quarter of 2007. Lower sales into the telecom market in the second quarter of 2007 also contributed to the decrease. Electrical sales increased due primarily to strong end-market demand and price realization, while automotive sales increased due primarily to strength in non-OEM segments and favorable currency effects.
Cash flow from operating activities increased to $15.0 million in the second quarter of 2007, after only $1.0 million in the first quarter of 2007. Capital expenditures increased as expected from $5.1 million in the first quarter of 2007 to $8.0 million in the second quarter of 2007, due primarily to higher spending related to plant transfers.
"Our electronics sales were disappointing in the second quarter, and while our other two businesses achieved solid increases, it wasn’t enough to compensate for the decline in electronics," said Gordon Hunter, Chief Executive Officer. "However, we now believe we are substantially through the inventory correction and that electronics sales will increase in the second half of the year."
