Electronic components manufacturer CTS (CTS) on Wednesday missed Wall Street’s target for earnings in the third quarter while beating views on sales. CTS stock plummeted on the news.


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The Lisle, Ill.-based company earned an adjusted 62 cents a share on sales of $151.9 million in the September quarter. Analysts polled by FactSet had predicted earnings of 64 cents a share on sales of $149.3 million. On a year-over-year basis, CTS earnings rose 35% while sales climbed 24%.

CTS raised its sales guidance for the full year to account for its recent acquisition of Ferroperm. It now expects 2022 sales in the range of $585 million to $595 million. CTS previously had guided to full-year sales of $570 million to $600 million. The midpoint of its new sales guidance, $590 million, is slightly above Wall Street’s consensus estimate of $589.2 million.

CTS kept its outlook for 2022 adjusted earnings per share unchanged at $2.40 to $2.55. However, the midpoint of $2.48 is below the Street’s estimate for $2.58 a share.

CTS Stock Tumbles

“Our advanced materials expertise, coupled with the strength of our commercial teams, are helping to accelerate our diversification into non-transportation end markets, enabling CTS’ performance in an uncertain macroeconomic environment,” Chief Executive Kieran O’Sullivan said in a news release.

On the stock market today, CTS stock dropped 17.8% to close at 36.17. It ended the regular session Tuesday down 0.7% to 44.

On Oct. 4, CTS stock broke out of a flat base at a buy point of 44.09, according to IBD MarketSmith charts. However, it triggered a stop-loss sell rule when it fell more than 7% below its buy point on Oct. 12, based on IBD trading guidelines. But it rallied back to the buy zone this week.

CTS stock is on IBD’s Tech Leaders list. It has an IBD Relative Strength Rating of 96 out of 99. That means it has outperformed 96% of stocks over the past 12 months.

CTS designs and manufactures sensors, actuators and connectivity components. It serves customers in the aerospace, defense, industrial, medical, and transportation markets.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.


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