Methode Electronics' EPS dropped in Q1 2025 due to a combination of revenue decline and operational challenges:
- Revenue Decline: The company experienced a significant 7.6% year-over-year decline in revenue, totaling $239.9 million12. This reduction in sales fell short of market expectations and was primarily attributed to the automotive segment's underperformance. The automotive segment saw a notable fall of over 17% in sales, which is a critical contributor to Methode Electronics' revenue. This decline is due to the phase-out of older electric vehicle lighting programs and a slower pace of new EV model launches3.
- Segmental Performance: The industrial segment, although performing robustly, particularly in power products for data centers, was unable to counterbalance the automotive segment's decline. This indicates that the overall revenue shortfall was not adequately mitigated by strong performance in other areas3.
- Strategic Challenges: Methode Electronics is facing strategic challenges that necessitate a redirection of its growth focus. The company's management has indicated a 10.7% decrease in sales guidance for the forthcoming quarter, which further emphasizes the urgency for strategic shifts1.
In summary, the drop in EPS is a result of a combination of revenue decline in automotive segment, revenue shortfall and strategic challenges.