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Why Shares of Littelfuse Inc. Jumped 12% in February

By Timothy Green - Mar 9, 2016 at 9:40AM

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Despite economic headwinds, the company reported a solid quarter, and management was optimistic about 2016.

What: Shares of Littelfuse (LFUS -0.41%), a supplier of circuit protection products, surged 11.5% during February, according to data provided by S&P Global Market Intelligence. The gains were driven by a strong fourth-quarter earnings report on Feb. 2.

Image source: Littelfuse.

So what: Littelfuse reported quarterly revenue of $220 million, up 6.5% year over year and about $6 million higher than the average analyst estimate. Excluding negative effects related to currency, revenue increased by 10%. Sales in the electronics segment grew 2% year over year, while automotive sales jumped 10% and electrical sales rose 12%.

Littelfuse reported non-GAAP earnings of $1.21 per share, up 18.6% year over year and $0.04 better than analyst expectations. On a GAAP basis, Littelfuse reported EPS of $1.00, up from $0.86 during the prior-year period.

In addition to beating analyst estimates across the board, Littelfuse provided guidance calling for revenue growth during the first quarter of 2016. The company expects to grow revenue by 4%, or 6% adjusting for currency, while non-GAAP earnings are expected in a range of $1.21 to $1.35.

Now what: Littelfuse performed well during the fourth quarter, and management struck an optimistic tone. "We head into 2016 with good momentum and the groundwork laid for substantial margin improvement," said CFO Phil Franklin. "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."

After shares of Littelfuse sank in January, a solid earnings report and optimistic guidance were enough to send the stock soaring in February.

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