UPDATE: Methode Electronics (MEI) Posts Q4 EPS of 68c; Issues Light FY16 Outlook

Methode Electronics (NYSE: MEI) reported Q4 EPS of $0.68, which may not compare with the analyst estimate of $0.68. Revenue for the quarter came in at $227.3 million versus the consensus estimate of $228.07 million.

Excluding the fourth-quarter impacts of goodwill and intangible asset impairments, sales of businesses/investments, and tax credits/valuation allowances, Methode's Fiscal 2015 fourth-quarter net income was $20.1 million, or $0.51 per share, and Fiscal 2014 fourth-quarter net income was $14.6 million, or $0.38 per share. The details regarding the excluded items follow:

• Goodwill and intangible asset impairments: pre-tax charges of $11.1 million in Fiscal 2015 and $1.7 million in Fiscal 2014;
• Sales of businesses and investments: pre-tax gain of $7.7 million on the sale of Trace Laboratories in Fiscal 2015 and the pre-tax gain on the sale of the Lumidigm investment of $3.2 million in Fiscal 2014; and
• Tax credits and valuation allowances: benefit of $8.6 million in Fiscal 2015 and $32.6 million in Fiscal 2014.

Guidance:

Methode anticipates sales in the range of $830 million to $865 million, income from operations in the range of $108 to $119 million and earnings per share in the range of $2.07 to $2.22. (Consensus estimates call for FY16 revenue of $918 million and EPS of $2.75.) The guidance ranges for Fiscal 2016 are based upon management's expectations regarding a variety of factors and involve a number of risks and uncertainties, including the following significant factors considered by management in preparing this guidance:

• pricing concessions in the Automotive segment;
• lower Ford revenues due to a center console program going end of life;
• lower PowerRail revenues in the Power Product segment;
• an effective tax rate of approximately 25 percent, and no significant changes in tax valuation allowances or enacted tax laws;
• the sales volumes and timing thereof for certain makes and models of automobiles, trucks and SUVs for Fiscal 2016;
• successful commercialization of Dabir Therapeutic Surfaces;
• sales mix within the markets served;
• the uncertainty of the European economy;
• the finished goods position of large customers;
• foreign exchange gains or losses;
• the anticipated impact of, and costs associated with, litigation instituted against a former Hetronic distributor in Europe;
• no future unusual or one-time items; and
• no acquisitions or divestitures.

For earnings history and earnings-related data on Methode Electronics (MEI) click here.

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