Littelfuse, Inc. (LFUS) Earnings & Analysis

Latest quarter

Littelfuse reported Q3 FY2026 revenue of $766.7 million, below the $790.0 million consensus, while adjusted earnings per share of $5.79 exceeded the $4.95 consensus. Revenue also came in below the company’s own $780.0 million to $800.0 million guidance range; CFO Abhishek Khandelwal said the forecast had not included a one-time Dortmund contract amendment fee.

The filing shows revenue rose 22.7% from $624.6 million a year earlier, helped by higher Electronics volume and $36.1 million in incremental sales from the Basler acquisition. The $28.5 million amendment fee reduced semiconductor sales. Khandelwal said commercial vehicle organic sales grew 20%, while passenger vehicle organic sales fell 5% amid lower global auto production and planned exits from sensor lines.

Littelfuse reported diluted earnings per share of $4.49, up from $2.77 a year earlier. Gross margin rose to 41.5% from 38.6%, and operating margin rose to 20.0% from 15.6%; the filing attributed the operating-margin improvement partly to volume leverage, pricing and product mix. Free cash flow was $215.8 million, compared with $136.9 million a year earlier.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CEO Gregory Henderson said data centers were a leading contributor to the quarter and that the company’s data center backlog was expanding. He also cited demand from medical, aerospace and defense applications, grid modernization and industrial automation. CFO Abhishek Khandelwal said Electronics organic sales grew 27%, including 30% growth in passive products and 24% in semiconductor products.

Asked about the demand cycle and customer ordering, Henderson said customers were booking further ahead, including into the following year, while Littelfuse’s lead times remained broadly normal. He said direct contact with customers gives the company insight into their plans and that he did not see a broad customer inventory buildup.

On data centers, Henderson said most revenue shipped today was still for low-voltage systems, with higher-voltage platforms yet to ramp meaningfully. He said bookings, backlog and design wins included more contribution from higher-voltage systems, while the company continued to win designs in both categories.

Henderson said Littelfuse was passing price increases to customers as needed amid inflation in commodities, freight and fuel, while using productivity initiatives to improve its cost structure. Khandelwal said the company’s intent was to remain price-cost neutral in 2026. He attributed the quarter’s adjusted earnings improvement to volume leverage, mix, pricing and operational execution.

Henderson said the Dortmund supply agreement amendment accelerated contracted deliveries and removed restrictive covenants in exchange for a one-time payment. He said it gave Littelfuse flexibility as it evaluates its power semiconductor footprint. Khandelwal said the company had identified $5 million in 2026 savings toward its $50 million optimization goal and expected more in 2027.

Discussing Basler, Henderson said Littelfuse’s data center relationships were creating opportunities for Basler products, while Basler’s utility and grid presence was opening opportunities for Littelfuse products. For the quarter ahead, Khandelwal said the company expected demand across several key markets, supported by backlog and customer engagement.

Guidance

For Q4 FY2026, Littelfuse expects net sales of $750.0 million to $770.0 million and adjusted diluted earnings per share of $5.05 to $5.25, assuming an adjusted effective tax rate of approximately 24.0%.

Khandelwal said the latest FY2026 revenue outlook for Basler was $130.0 million to $140.0 million. In the prior quarter, the company’s outlook was approximately $135.0 million to $140.0 million.