Littelfuse falls on $301M impairment despite earnings beat
Semiconductor business write-down overshadows 12% revenue growth and strong Q1 outlook
Littelfuse shares fell approximately 3% in pre-market trading on Wednesday after the electronic components manufacturer reported a $301 million non-cash goodwill impairment charge that overshadowed what was otherwise a strong quarter of operational growth.
The Chicago-based company reported fourth-quarter net sales of $594 million, beating analyst expectations of $583.5 million and representing 12% year-over-year growth. However, adjusted earnings per share of $2.69 fell short of the consensus estimate, leading investors to focus on the substantial impairment charge rather than the underlying business performance.
The $301.2 million impairment was recorded in the Semiconductor Products business within the Electronics Segment, reflecting "weaker sales and profitability than originally expected, amid persistent soft market conditions in that particular business unit," according to the company's earnings release. This charge resulted in a GAAP loss per share of $9.72 for the quarter, though the company noted that the write-down is non-cash and does not affect operational cash flow.
Beneath the headline-grabbing impairment, Littelfuse delivered solid operational metrics. Organic revenue grew 7% year-over-year, while adjusted EPS surged 75% compared to the prior year. The company generated $139 million in cash flow from operations and $120 million in free cash flow during the quarter. For the full year 2025, Littelfuse achieved $2.39 billion in sales, up 9% year-over-year, with adjusted EPS rising 34% to $10.68.
Chief Executive Officer Greg Henderson struck an optimistic tone, highlighting that the company "finished the year with significant momentum" and delivered results above guidance. He noted that Littelfuse is "entering 2026 from a position of strength" as it leverages its "leadership in electrical energy transfer to accelerate growth, broaden our customer base, and drive operational enhancements."
Looking ahead, management provided first-quarter guidance that suggests continued momentum. The company projects net sales of $625-645 million, representing approximately 15% revenue growth compared to the prior year, with adjusted EPS expected in the range of $2.70-$2.90. The outlook is supported by what Henderson described as a "strengthening backlog, deepening customer engagement, and contributions from the Basler acquisition." Littelfuse completed the $350 million all-cash acquisition of Basler Electric in December 2025, a move analysts expect will be accretive to adjusted EPS in 2026.
The semiconductor write-down comes at a challenging moment for the industry. While the World Semiconductor Trade Statistics projects the global semiconductor market will grow by more than 25% in 2026, reaching $975 billion, some analysts warn that the current boom may be "structurally fragile" and overly dependent on artificial intelligence demand. Littelfuse's impairment reflects the uneven nature of this recovery, with certain segments facing prolonged softness even as broader industry conditions improve.
Despite the pre-market decline, Littelfuse shares have performed strongly over the past year, with the stock gaining more than 100% from its 52-week low of $140.76. The company closed at $296.17 on Tuesday, giving it a market capitalization of approximately $7.2 billion. Analysts have a consensus target price of $321.25, suggesting room for further upside if the company can execute on its growth strategy and successfully integrate the Basler acquisition.
With a forward price-to-earnings ratio of 23.26, Littelfuse trades at a reasonable valuation relative to its growth prospects, particularly given the 15% revenue growth projected for the first quarter. The company's focus on high-growth sectors such as electric vehicles, industrial automation, and grid infrastructure positions it to benefit from longer-term electrification trends, even as it navigates near-term challenges in its semiconductor business.