Methode Electronics 2026 Q2 Earnings Widened Losses Amid Revenue Decline

Methode Electronics (MEI) reported a 15.6% year-over-year revenue drop to $246.90 million in Q2 2026, with a net loss widening to $9.90 million (518.8% increase). The company reaffirmed its fiscal 2026 guidance for $900–$1,000 million in sales and $70–$80 million in adjusted EBITDA, despite challenges from shifting EV market demand and operational pressures.

Revenue

The Automotive segment contributed $117.50 million, while the Industrial segment brought in $138.70 million. The Interface segment reported $9.50 million in revenue, and the Eliminations/Corporate segment recorded a negative $18.80 million. Consolidated revenue totaled $246.90 million, reflecting a 15.6% decline from $292.60 million in the prior-year quarter.

Earnings/Net Income

Net losses deepened to $0.28 per share in Q2 2026, a 460% wider loss compared to $0.05 per share in Q2 2025. The company’s net loss surged to $9.90 million, a 518.8% increase from $1.60 million in the prior year. This marked a significant deterioration in profitability, underscoring operational and market challenges.

Price Action

Methode Electronics’ stock surged 5.46% on the day of the report, with a 18.72% weekly gain and a 29.12% monthly rise.

Post-Earnings Price Action Review

The strategy of buying shares after a revenue increase quarter-over-quarter and holding for 30 days delivered an 83.52% loss over three years, underperforming the benchmark return of 70.56%. The excess return was -154.08%, and the strategy’s CAGR was -45.43%, indicating a substantial decline in value.

CEO Commentary

CEO Jon DeGaynor emphasized progress in the company’s transformation, driven by operational reliability improvements. He acknowledged a $100 million sales decline due to EV market dynamics but reaffirmed fiscal 2026 guidance, citing strategic operational enhancements and confidence in positive free cash flow.

Guidance

The company maintained its fiscal 2026 guidance for $900–$1,000 million in net sales and $70–$80 million in adjusted EBITDA. Risks include tariffs, program launches, inflation, and global economic instability. Free cash flow positivity is anticipated, with adjustments possible due to supply chain disruptions or restructuring efforts.

Additional News

Methode’s Q2 non-GAAP EPS of -$0.19 beat estimates by $0.01, while revenue of $246.9M exceeded forecasts by $9.21M. Despite this, shares fell 5% post-earnings as the $9.9M net loss exceeded expectations. The company highlighted a $100M annual sales decline from EV market shifts but reiterated its fiscal 2026 targets.