Littelfuse (NASDAQ:LFUS), a provider of circuit protection products, reported its fourth-quarter results before the market opened on Feb. 2. The company's revenue and earnings came in at the high end of its guidance, with all three segments reporting growth. An extra week during the fourth quarter compared with the prior-year period helped boost Littelfuse's numbers, while currency continued to have a negative impact.

Littelfuse results: The raw numbers

 Metric

Q4 2015

Q4 2014

Growth (YOY)

Sales

$220.0 million

$206.6 million

6.5%

Net income

$22.5 million

$19.5 million

15.1%

GAAP EPS

$1.00

$0.86

16.3%

Adjusted EPS

$1.21

$1.02

18.6%

Source: Littelfuse Q4 earnings report.

What happened with Littelfuse this quarter?
Littelfuse put up better growth numbers during the fourth quarter than in the third quarter, when its revenue and earnings declined year over year.

  • Sales rose by 10% year over year, adjusted for currency, up from 4% growth during the third quarter.
  • Electrical sales increased by 12% year over year, or by 17% adjusting for currency, driven by the core fuse business.
  • Automotive sales rose 10% year over year, or 16% adjusting for currency, with sales in all three geographic regions growing.
  • Electronics sales increased 2% year over year, or 4% adjusting for currency, driven by growth in passive and semiconductor products. Capacity constraints for sensor products partially offset this growth.
  • In November, Littelfuse announced that it was acquiring the circuit protection devices business of TE Connectivity for $350 million.

Littelfuse also provided guidance for the first quarter.

  • Revenue is expected to be in the range of $213 million to $223 million, up 4% year over year at the midpoint, or up 6% adjusting for currency.
  • Adjusted earnings are expected to be in the range of $1.21 to $1.35 per share, compared to $1.08 during the first quarter of 2015.

What management had to say
CEO Gordon Hunter pointed to the company's strong performance despite macroeconomic headwinds. "This was without question a challenging year, with substantial macroeconomic headwinds and volatility in currency and commodity markets," Hunter said. "Despite these challenges, our teams executed well across many fronts and delivered record performance for sales, adjusted earnings and cash flow. This strong 2015 performance, coupled with the pending acquisition of the CPD business, puts us on track with the five-year growth target we set at the end of 2012."

CFO Phil Franklin expects Littelfuse to improve its margins during 2016:

We head into 2016 with good momentum and the groundwork laid for substantial margin improvement. Despite concerns about the global economy and weakness in some of our end markets, we believe we can grow revenue in the low to mid-single digits in 2016. Assuming modest top-line growth, we believe we can expand our operating margin by approximately 150 basis points compared to 2015 as we benefit from completion of our footprint consolidation projects, further progress on automotive sensor profitability initiatives and continued gains in manufacturing performance.

Looking forward
Currency continues to negatively affect Littelfuse's results, but the company managed to report solid growth during the fourth quarter despite this challenge. Operating profit in all of Littelfuse's segments grew during the fourth quarter, with the Automotive and Industrial segments posting 41% and 56% year-over-year operating profit growth, respectively.

When the deal for TE Connectivity's CPD business closes during 2016, Littelfuse will gain approximately $190 million of annual revenue, which should put the company over the $1 billion mark. While currency effects and general macroeconomic uncertainty could weigh on Littelfuse's results in 2016, the company is performing well despite these challenges.

Timothy Green has no position in any stocks mentioned. The Motley Fool recommends Littelfuse. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.