Molex Incorporated Earnings: Streak of Four Straight Profit Rises Snapped

S&P 500 (NYSE:SPY) component Molex Incorporated (NASDAQ:MOLX) reported its results for the second quarter. Molex manufactures electronic components, including switches, integrated products, and electrical and fiber optic interconnection products and systems.

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Molex Incorporated Earnings Cheat Sheet for the Second Quarter

Results: Net income for Molex Incorporated fell to $64 million (36 cents per share) vs. $78.3 million (45 cents per share) a year earlier. This is a decline of 18.2% from the year earlier quarter.

Revenue: Fell 4.9% to $857.6 million from the year earlier quarter.

Actual vs. Wall St. Expectations: MOLX fell short of the mean analyst estimate of 41 cents per share. It fell short of the average revenue estimate of $890.2 million.

Quoting Management: “We continue to be optimistic about the future as our new product pipeline is quite strong and long-term growth opportunities remain healthy,” commented Martin P. Slark, Molex’s Chief Executive Officer. “The uncertain economic environment coupled with the disruption from the floods in Thailand, however, made the December quarter challenging from a booking and revenue perspective. We are pleased with our cost control, cash flow and resulting margins and are encouraged by improvements in recent booking trends. During the quarter we completed the purchase of Temp-Flex Cable, Inc., a specialty wire and cable company. Temp-Flex increases our presence in the medical market and will complement our high performance cable business.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the first quarter, net income rose 7.2% from the year earlier, while the figure increased 70.2% in the fourth quarter of the last fiscal year, more than twofold in the third quarter of the last fiscal year and more than fourfold in the second quarter of the last fiscal year.

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the second quarter of the last fiscal year, which saw revenue rise 23.6%.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 46 cents versus a mean estimate of net income of 42 cents per share.

The company’s cost of sales fell 5.7% from a year earlier to $594.7 million. Last quarter, cost of sales was 69.3% or revenue versus 69.9% a year earlier.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the third quarter is 39 cents per share, down from 41 cents ninety days ago. For the fiscal year, the average estimate has moved down from $1.73 a share to $1.72 over the last ninety days.

Competitors to Watch: Amphenol Corporation (NYSE:APH), TE Connectivity Ltd. (NYSE:TEL), RF Industries, Ltd. (NASDAQ:RFIL), AVX Corporation (NYSE:AVX), Methode Electronics Inc. (NYSE:MEI), Thomas & Betts Corporation (NYSE:TNB), Spectrum Control, Inc. (NASDAQ:SPEC), 3M Company (NYSE:MMM), Illinois Tool Works Inc. (NYSE:ITW), and Optical Cable Corporation (NASDAQ:OCCF).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com