CTS Corp. reported a net income of $600,000, or 2 cents per diluted share, on sales of $105.8 million in the first quarter, compared to a net loss of $1.9 million, or 6 cents per diluted share, on sales of $112.6 million in the first quarter of 2002. Consensus estimates had projected earnings of 1-cent per share.
The Elkhart, Ind., component supplier attributed the improved earnings to lower operating expenses due to restructuring and cost reduction programs and lower depreciation and interest expenses.
"While we had expected sales to decline from the fourth quarter of 2002 due to seasonal factors, it is also clear that the markets we serve continue to exhibit weakness," said Donald Schwanz, chairman and chief executive of CTS, in a statement. "However, our new business development initiatives are meeting our expectations and we believe they will provide the foundation for future growth and profitability."
Components sales declined to $60.3 million from $64.9 million a year ago, due to lower sales for mobile phone parts. During the quarter, CTS stopped producing 3.2 mm x 5 mm TCXO components used in cell phone applications and sold the production assets to TXC Corp. under a previously announced agreement.
EMS sales decreased to $45.5 million from $47.7 million a year earlier due to lower demand for networking and other infrastructure systems equipment.