Methode Electronics Inc (NYSE: MEI)
Methode Electronics Inc (MEI), a global developer of market components and subsystem devices today reported their fiscal 2016 first quarter results which beat consensus estimates.
Methode Electronics Inc Earnings and Outlooks
Methode’s first-quarter Fiscal 2016 net sales decreased $14.8 million, or 6.8 percent, to $203.3 million from $218.1 million in the same quarter of Fiscal 2015. Year over year, currency rate fluctuations decreased net sales by $6.1 million. Net income increased $2.1 million to $23.5 million, or $0.60 per share, in the first quarter of Fiscal 2016 from $21.4 million, or $0.55 per share, in the same period of Fiscal 2015. Market Wired
Methode Electronics Inc CEO’s Comments
President and Chief Executive Officer, Donald W. Duda said, “First-quarter profitability was positively impacted by favorable currency translation on raw materials and labor costs, favorable commodity pricing and the refund of import duties in our Automotive segment. However, costs and manufacturing inefficiencies in our Interface segment due to the transfer of manufacturing from the Philippines to Egypt and the unfavorable currency effect on sales negatively impacted our results. Looking forward, we are anticipating revenues in our Power Products segment, which is typically one of our highest margin businesses, will be considerably lower than we originally expected for the remainder of this fiscal year, approaching break- even in the second quarter.”
Mr. Duda concluded, “While we will continue to make investments in our business through new product development, vertical integration and potential acquisitions, we believe the initiation of a share repurchase program demonstrates our continued commitment to creating and returning value to our shareholders.” Market Wired
MEI Technical Analysis
MEI gapped up in price today to $30.26 up from yesterday’s close of $27.39 which is a 9% increase in price based on favorable news. Taking a look at the daily chart we can see the last time the stock traded at these levels was back on June 25 when it traded at $31.38. Only one day before that on June 24 the stock was trading at $43.07, it tanked nearly 30% on that day when it reported its fiscal fourth quarter earnings which missed expectations. As we can see the stock has been very volatile in the past few months. The stock has a big gap down to fill up so we may see a nice spike up based on today’s positive earnings release. The stock hit a pre market high of $30.30 so it opened right at the high. For trading purposes my entry point would be $30.30 which was the pre market high. My stop loss would be $30.00 fearing anything below that and the stock will start to fill in today’s gap up.
Methode Electronics, Inc. designs, manufactures, and markets components and subsystem devices in the United States, China, Malta, and internationally. Its Automotive segment supplies electronic and electro-mechanical devices, and related products to automobile original equipment manufacturers directly or through their tiered suppliers, and selling partners and distributors. This segments products include control switches for electrical power and signals, connectors for electrical devices, integrated control components, torque sensing products, switches and sensors that monitor the operation or status of a component or system, and packaging electrical components. The companys Interface segment offers conductive polymers, connectors, custom cable assemblies, industrial safety radio remote controls, optical and copper transceivers, personal computer and express card packaging and terminators, solid-state field effect interface panels, and thick film inks; and services comprise the design and installation of fiber optic and copper infrastructure systems, and manufacturing active and passive optical components. This segments interface solutions are used in aerospace, appliance, commercial, computer, construction, consumer, material handling, medical, military, mining, networking, storage, and telecommunication markets. Its Power Products segment manufactures braided flexible cables, current-carrying laminated bus devices, custom power-product assemblies, flexible power cabling systems, and powder coated bus bars for aerospace, computers, industrial and power conversion, military, telecommunications, and transportation markets. The companys Other segment offers medical devices, inverters and battery systems, and insulated gate bipolar transistor solutions; and services for the qualification, testing and certification, and analysis of electronic and optical components. Methode Electronics, Inc. was founded in 1946 and is headquartered in Chicago, Illinois. Yahoo Finance