Littelfuse, Inc. reported sales and earnings for the third quarter of 2007. Sales for the third quarter of 2007 were $140.2 million. This was up 9% from the second quarter of 2007 compared to guidance of a 4% to 8% sequential increase. Diluted earnings were $0.64 per share, including a one-time gain on the sale of excess land in Ireland and restructuring charges related to plant shutdowns. Excluding these special items, diluted earnings per share were $0.48, compared to guidance of $0.41 to $0.46.
Sales for the third quarter of 2007 were down 2% compared to the third quarter of 2006, due to lower electronics sales in all regions partially offset by growth in automotive and electrical. Electronics sales declined 9% compared to the prior-year quarter due primarily to the distributor inventory build-up that occurred in the prior year. Continued weakness in parts of the telecom segment also contributed to the decline. Automotive sales increased 12% due to growth in all regions and favorable currency effects. Electrical sales increased 15% primarily due to strong end-market demand and price realization.
Cash flow from operating activities was $15.3 million for the third quarter, which was the strongest quarter so far this year, despite almost $7 million of funding for the U.S., U.K. and Ireland pension plans. This strong cash flow was due to improved profitability and a $6 million reduction in inventory. Gross capital expenditures increased as expected to $13.1 million for the third quarter, primarily reflecting expenditures related to the planned manufacturing transfers to Mexico, China and the Philippines.
"We are pleased with the strong performance in the electrical and automotive businesses for the third quarter," said Gordon Hunter, Chief Executive Officer. "After several quarters of weakness, electronics sales bounced back during the quarter, confirming our previous statement that the electronic inventory correction is behind us."
