Rogers Corp (ROG) Announces Q3 2023 Earnings, Gross Margin Improvement Continues
Rogers Corp (NYSE:ROG) reports Q3 2023 net sales of $229.1 million, a slight decrease from Q2 2023's $230.8 million.
Gross margin improved to 35.1% in Q3 2023, marking the third consecutive quarter of gross margin improvement.
Net income for Q3 2023 was $19.0 million, up from $17.9 million in Q2 2023.
Adjusted EBITDA for Q3 2023 was $45.4 million, up from $43.7 million in Q2 2023.
On October 26, 2023, Rogers Corp (NYSE:ROG) released its financial results for the third quarter of 2023. Despite challenging global economic conditions and customer inventory destocking, the company maintained a steady performance with gross margin increasing to over 35%. This marks the third consecutive quarter of gross margin improvement, demonstrating the company's commitment to enhancing its cost structure.
Financial Performance Overview
Net sales for Q3 2023 were $229.1 million, a slight decrease of 0.7% from the previous quarter. This was primarily due to lower sales in the Advanced Electronics Solutions (AES) business unit, partially offset by higher sales in the Elastomeric Material Solutions (EMS) business unit. Despite the challenging economic conditions, the company's gross margin improved to 35.1% from 34.5% in Q2 2023, thanks to procurement cost savings and a favorable product mix.
Income Statement Highlights
Net income for the quarter was $19.0 million, up from $17.9 million in Q2 2023. Diluted earnings per share also increased to $1.02 from $0.96 in the previous quarter. On an adjusted basis, earnings were $1.24 per diluted share, up from $1.07 in Q2 2023. The increase in earnings was attributed to an increase in other income and lower interest expense.
Balance Sheet and Cash Flow Statement Highlights
As of the end of Q3 2023, Rogers Corp (NYSE:ROG) had cash and cash equivalents of $126.5 million, a decrease of $15.0 million from the previous quarter. The company generated $42.0 million in net cash from operating activities during the quarter. Capital expenditures for the quarter were $6.7 million, and a principal payment of $50 million was made on the outstanding borrowings under the company's revolving credit facility.
Looking Ahead
For Q4 2023, Rogers Corp (NYSE:ROG) expects net sales to be in the range of $215 to $225 million, with a gross margin between 34.0% and 35.0%. Earnings per diluted share are projected to be between $0.71 and $0.91, and adjusted earnings per diluted share are expected to be between $0.90 and $1.10.
Rogers Corp (NYSE:ROG) remains committed to improving its cost structure and making targeted investments in fast-growing markets. The company's operational excellence initiatives and strategic investments are expected to drive further gross margin and earnings improvement in the future.
Explore the complete 8-K earnings release (here) from Rogers Corp for further details.
This article first appeared on GuruFocus.
