Methode Electronics (NYSE:MEI) shares fall nearly 20% on Thursday after the device component maker slashed its annual sales and profit forecast.
Even though revenue for the reported quarter rose nearly 3% and beat analysts’ estimates, adjusted profit of $0.06 per share missed expectation by $0.17.
The Chicago-based company blamed the shortfall in earnings to operational inefficiencies in its North American auto operations caused mainly by labor and vendor issues, leading to “planning deficiencies, inventory shortages, unrecoverable spot purchases and premium freight, and delayed shipments.”
“The residual effects will also impact our second quarter and, along with significant further weakening in the e-bike market, are the primary drivers to our lowering of earnings guidance for the full year,” said Chief Executive Officer Donald Duda.
The Chicago-based company now expects annual net sales between $1.14 billion and $1.18 billion, compared to previous outlook of $1.15 billion and $1.20 billion.
Earnings per share (EPS) for 2024 is expected to be in the range of $0.80 to $1.00, while previously it was $1.55 per share and $1.75 per share.
Seeking Alpha’s Quant ratings considers the stock a “strong sell” with a score of 1.46, while Seeking Alpha analysts and Wall Street rate it as “buy”.
Methode, which has a market valuation of $1.08 billion, has lost nearly 47% so far this year.