Methode Electronics Q1 Top-Line Misses Driven By Weaker Auto Segment

Methode Electronics, Inc MEI reported a first-quarter FY23 net sales decline of 1.9% year-on-year to $282.4 million, missing the consensus of $286.4 million.
Weakness in the Automotive segment was partially offset by record sales in the Industrial segment driven by power distribution solutions and commercial vehicle lighting.
EPS of $0.58 topped the consensus of $0.52.
Segments: The Automotive segment's net sales decreased 9.8% Y/Y to $176.6 million.
Net sales for the Industrial segment grew by 17.3% Y/Y to $92.1 million, and the Interface segment was flattish Y/Y to $13 million.
Margin: The operating margin contracted 413 bps to 7.7% due to lower sales, higher materials, and other costs associated with supply chain disruptions.
Methode Electronics held $152.4 million in cash and equivalents. It generated $12.7 million in operating cash flow.
Outlook: Methode Electronic reiterated its FY23 revenue forecast of $1.16 billion - $1.21 billion against the consensus of $1.18 billion.
It continues to see EPS of $2.70- $3.10 versus the consensus of $2.82.
Price Action: MEI shares traded lower by 2.84% at $39.31 on the last check Thursday.

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