Methode Electronics Inc MEI reported the second-quarter FY22 net sales decline of 1.8% year-on-year to $295.5 million, beating the consensus of $275.8 million.
- The decrease was due to lower sales volumes in the Automotive segment, partially offset by higher sales volumes in the Industrial segment.
- EPS of $0.72 missed the consensus of $0.73.
- Segments: The Automotive segment's net sales decreased 9.1% Y/Y to $196 million.
- Net sales for the Industrial segment grew 18.9% Y/Y to $80.7 million, and the Interface segment rose 9.8% Y/Y to $18 million.
- Margin: The operating margin contracted 380 bps to 11.2% due to higher material and other costs associated with supply chain disruptions.
- Methode Electronic held $177.2 million in cash and equivalents. It generated $27 million in operating cash flow during Q2.
- CEO Donald W. Duda said, "While our businesses continued to be impacted by the ongoing supply chain and logistics disruptions, our mitigation efforts helped support solid sales, including a strong performance in the Industrial segment and a record for EV applications."
- Outlook: Methode Electronic cut the FY22 outlook from $1.175 billion - $1.235 billion to $1.14 billion - $1.16 billion against the consensus of $1.14 billion.
- The company cut the EPS outlook from $3.35 - $3.75 to $3.00 - $3.20 versus the consensus of $3.15.
- Price Action: MEI shares closed higher by 0.79% at $44.82 on Wednesday.
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