Industrial technology manufacturer Littelfuse NASDAQ: LFUS stock has staged a sharp reversal on a stellar fiscal Q1 2022 earnings. The maker of fuses and electronics protection products accommodates transportation and logistics, electronics, and industrial sectors. The Company achieved double-digit organic growth and managed to navigate supply chain disruptions. Littelfuse continues to capitalize on growth opportunities surrounding global sustainability, activity, and safety despite operating in a volatile macroeconomic context disrupted by COVID and Ukraine. China shutdowns will have a material impact on its next quarter's earnings. Material shortages led to supply chain disruptions which it expects to continue. However, the Company is successfully capitalizing on tailwind themes involving automation, connectivity, and electrification. Shares are trading at 15.5X forward earnings. Prudent investors looking for exposure capitalizing on these key tailwinds can look for opportunistic pullbacks in shares of Littelfuse.
Q1 Fiscal 2022 Earnings Release
On May 3, 2022, Littelfuse reported its Q1 fiscal 2022 results for the quarter ending March 2022. The Company reported earnings-per-share (EPS) of $4.99 versus consensus analyst estimates for $3.24, a $1.75 beat. Revenues rose 34.4% year-over-year (YoY) to $623.3 million, beating analyst estimates for $573.74 million. Littelfuse CEO Dave Heinzman commented, “Our organic growth trajectory combined with our strategy-led acquisitions continue to strengthen and diversify our business. As a result of our persistent execution, we remain extremely well-positioned to further capitalize on current and future growth opportunities within the global structural themes of sustainability, connectivity, and safety. We continue focusing on what we can control to drive our performance within a volatile market, which is reflected in our second-quarter outlook of continued double-digit year-over-year growth.”
Raised Guidance
The Company issued in-line guidance for its fiscal Q2 2022 EPS of $3.95 to $4.11 versus $3.51 consensus analyst estimates. Revenues are expected to come in between $594 million to $608 million compared to $603.63 million consensus analyst estimates.
Conference Call Takeaways
CEO Heinzman highlighted some noteworthy successes across its electronics, commercial vehicle, and industrial businesses. COVID-19 impacts were felt due to the shutdowns in China, impacting operations, and will have a material effect on fiscal Q2 2022 earnings. Its electronics division saw abundant demand and growth driven by applications including data centers, industrial automation, appliances, automotive electronics, and telecom infrastructure. The Company has grown and diversified through acquisitions in 2021 including Hartland Controls for HVAC and Carling Technologies for commercial vehicles, telco, and renewables. They also acquired C&K Switches, which expands the portfolio into high precision manufacturing, miniaturization, and haptics, and Embed, which provides embedded firmware for applications. They provide the ability to better serve clients in areas of engineering, design, and service. Littelfuse has additional capabilities to provide hardware and software solutions to clients, which include systems for transportation applications, controls for industrial applications, and electronic control modules. He concluded, “We secured business for data centers and telecom infrastructure with our responsiveness to customized solutions. In appliances, we expanded our presence with existing customers based on our long-term engagement. In addition, our product features won us business for building security systems and general-purpose electronics. Our ongoing success of winning business and our announced acquisition of C&K will serve as a platform for continued growth.”
LFUS Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provides a precise view of the landscape for LFUS stock. The weekly rifle chart downtrend bottomed near the $224.94 Fibonacci (fib) level and coiled on the earnings reaction. The weekly rifle chart downtrend stalled as the 5-period moving average (MA) started sloping up at $235.84 as the 15-period MA stalls at $247.48. The weekly 50-period MA sits at $271.23. The weekly 200-period MA support sits at $213.68 with weekly lower Bollinger Bands (BBs) at $193.24. The weekly market structure low (MSL) buy triggers a breakout through $262.56. The weekly stochastic is attempting to test the 20-band up again. The daily rifle chart breakout has a rising 5-period MA at $248.72 followed by the 15-period MA at $236.81 with 50-period MA support at $243.71. The daily upper BBs sits at $209.82, and the daily 200-period MA resistance sits at $275.21. The daily stochastic has risen to test the 80-band. Prudent investors can look for opportunistic pullback levels at the $237.94 fib, $234.37 fib, $224.94 fib, $215.51 fib, $211.26 fib, $202.08 fib, $197.02 fib, and the $194.09.
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