Circuit-protection product manufacturer Littelfuse (LFUS 0.92%) reported its third-quarter results before the market opened on Oct. 31. The acquisition of IXYS continued to drive most of the company's revenue growth, but revenue grew organically as well. Earnings grew at a slower rate than revenue, but the company still has more cost synergies to wring out of IXYS.

Littelfuse results: The raw numbers


Q3 2018

Q3 2017

Change (YOY)


$439.2 million

$317.9 million


Net income

$53.5 million

$42.8 million


GAAP earnings per share




Non-GAAP earnings per share




Data source: Littelfuse. YOY = year over year..

What happened with Littelfuse this quarter?

  • Excluding the impact of acquisitions, organic revenue grew by 8% year over year. That's down from 11% organic revenue growth in the second quarter.
  • Electronics revenue rose 68.5% year over year to $296.5 million. Organic revenue was up 12%.
  • Automotive revenue rose 0.5% year over year to $114.4 million. Organic revenue was up 1%.
  • Industrial revenue rose 0.4% year over year to $28.3 million. Organic revenue was up 10%.
  • Electronics segment operating income was $72.5 million, up 63.4% year over year. Automotive segment operating income was $10.9 million, down 35.4% year over year. Industrial segment operating income was $4.1 million, up 10% year over year.
  • Littelfuse completed the acquisition of Monolith Semiconductor in October.
  • About 200,000 shares were repurchased in October as part of Littelfuse's share repurchase program.

Littelfuse provided the following guidance for the fourth quarter:

  • Revenue is expected between $408 million and $420 million, up 36% year over year, and up 6% on an organic basis.
  • Non-GAAP earnings per share is expected between $1.92 and $2.06, up 10% year over year at the midpoint.
  • Adjusted effective tax rate is expected between 20% and 21%. For the full year, an adjusted effective tax rate of 20% is anticipated.
Solar fuses.

Image source: Littelfuse.

What management had to say

Littelfuse CEO David Heinzmann commented on the company's progress integrating the IXYS acquisition during the earnings call: "The IXYS acquisition continues to expand our reach into industrial electronics applications ... By the end of this year, we'll be more than 40% complete toward our $30 million run rate synergy target."

CFO Meenal Sethna described the company's share buyback program:

I think you've seen from our history, we are not the company that has an annual program, and we tend to be a little bit more opportunistic when it comes to share buyback and you're going to see us more likely to buy when we think our shares are undervalued or our shares take a dip. So that's philosophically how we think about it.

Looking forward

The acquisition of IXYS, which contributed nearly $100 million of revenue during the quarter, is still driving the bulk of Littelfuse's sales growth. But organic growth remained solid, even with the automotive segment producing sluggish results.

The fourth quarter will be seasonally weak, with revenue and earnings dropping a bit from the third quarter. A slowdown in global auto sales could put more pressure on the automotive segment, although growth in the electronics segment may be enough to pick up the slack.