Littelfuse (LFUS) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales and adjusted EPS exceeded the high end of guidance, with net sales of $558 million, driven by a resilient business model, portfolio optimization, and strong execution despite a 9% year-over-year decline.

• Strong free cash flow and a robust balance sheet support long-term growth, capital allocation priorities, and ongoing M&A and shareholder returns.

• Design-in activity and customer momentum remain strong, with confidence in a return to growth in Q4 2024 as passive electronics destocking is largely complete.

• Sustainability remains integral to strategy, with progress in electrification, renewables, and safety-critical applications.

• Ongoing soft industrial demand and lower Electronics segment volume are being managed through disciplined execution.

Financial highlights

• Q2 2024 revenue was $558 million (down 9% year-over-year and 8% organically); product line pruning reduced sales by 2%.

• GAAP diluted EPS was $1.82 (down from $2.79 prior year); adjusted diluted EPS was $1.97.

• Operating cash flow was $69 million; free cash flow $50 million in Q2, with a 98% YTD conversion rate.

• GAAP operating margin was 11.7%; adjusted operating margin 12.7%; adjusted EBITDA margin 18.6%.

• Returned $41 million to shareholders in Q2 ($25M buybacks, $16M dividends); board approved 8% dividend increase to $0.70 per share.

Outlook and guidance

• Q3 2024 sales expected between $540–$570 million; adjusted EPS guidance is $1.95–$2.15; adjusted effective tax rate projected at ~26%.

• Full-year 2024: product pruning to reduce total sales by ~2%, transportation sales by ~6%; FX and commodity headwinds expected to be a 1% sales and $0.40 EPS headwind.

• Operating margin guidance for 2024 is 12–14%; electronics margins in mid-teens, industrial in low-teens, transportation to exit year in high single digits.

• Full-year tax rate estimated at 23–26%; $100 million in capital expenditures planned, including Dortmund fab investments.

• Management expects growth to resume in Q4 2024, with ongoing customer caution.