Shares of industrial supplier CTS Corporation (CTS 1.05%) jumped as much as 13.3% in trading on Tuesday after the company reported fourth-quarter 2023 financial results. Shares are still up 10.2% as of 2 p.m. ET.
Better than expected
CTS isn't blowing the doors off the industry, but it's at least performing better than expected. Revenue was down 12% in the quarter to $125 million and net income was flat at $15 million, or $0.49 per share.
Analysts were expecting revenue of $124.5 million and earnings of just $0.46 per share, so clearing that bar was enough for investors today.
For the quarter, non-transportation end market demand fell 22% as industrial and distribution customers pulled back on spending. Transportation fell 3% on slower commercial vehicle sales.
More of the same in 2024
Management said 2024 revenue would be $530 million to $570 million, flat with the $550 million recorded in 2023. Earnings are expected to be $2.10 to $2.35 per share, up from $1.92 per share.
Buybacks are starting to help CTS' earnings per share and a $100 million buyback program was recently announced. On the balance sheet, there's $163.9 million in stock and $67.5 million in debt, so there's room to use all of the buyback relatively quickly if the company chooses to.
I see this as a case of management setting the bar low enough that it could clear it in earnings, but until CTS grows, it's a stock I'm going to stay out of.
