CHANDLER, Ariz. - Rogers Corporation (NYSE:ROG) experienced a 4% decline in its stock price following the release of its fourth-quarter financial results, which fell short of Wall Street expectations. The company reported adjusted earnings per share (EPS) of $0.60, significantly below the analyst estimate of $1.00. Revenue also missed the mark, coming in at $204.6 million against the anticipated $220 million.
The company's fourth-quarter performance was impacted by persistent macroeconomic headwinds, leading to inventory destocking by customers and softness in key markets such as industrial and portable electronics. This resulted in a 10.7% decrease in net sales compared to the previous quarter and an 8.6% drop YoY from $223.7 million reported in the fourth quarter of 2022. Gross margin saw a slight improvement YoY, rising to 32.9% from 31.8%.
Rogers' President and CEO, Colin Gouveia, commented on the challenging environment, stating, "The lower sales volumes, especially in industrial and portable electronics markets, more than offset our cost improvements in the quarter and resulted in lower gross margins." He also expressed cautious optimism for midyear improvements while emphasizing the company's focus on executing its strategy and managing controllable factors.
Looking ahead to the first quarter of 2024, Rogers provided guidance that also fell below analyst consensus. The company expects EPS to be between $0.45 and $0.65, compared to the consensus estimate of $1.03. Revenue projections for Q1 2024 are set at $205 to $215 million, below the expected $229.4 million. The projected gross margin for the upcoming quarter is estimated to range from 32.0% to 33.0%.
Despite the current challenges, Gouveia remains confident in the company's long-term strategy and growth opportunities, particularly in key markets like electric vehicles (EV/HEV). However, the timeline for achieving previously issued financial targets has been extended beyond 2025 due to the uncertain market conditions and the timing of EV market growth.
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