Littlefuse: Great expectations

Littlefuse, Inc. (Nasdaq:LFUS) is in the process of laying the groundwork for big things to come.

The company manufactures and sells circuit protection and related devices to a global base of customers in the electrical and automotive industries. At a market cap of $788 million, the Illinois-based company has been in business since 1927.

The company’s founder Edward Sundt invented the first small, fast-acting protective fuse that was used to prevent sensitive test meters from burning out. Since then, the company has done everything from developing mission-critical components for NASA to making fuses for General Motors (NYSE:GM). Today some of its major customers include Cisco Systems (Nasdaq:CSCO), General Electric (NYSE:GE), Ford (NYSE:F) and Alcatel-Lucent (NYSE:ALU).

The company operates in three major segments: electronics, automotive and electrical. The electronics segment presently accounts for a little more than 60% of the company’s total sales. The automotive business makes up just under 30% of Littlefuse’s sales, with the electrical segment coming up with the remainder. The company’s sales are well-diversified from a geographical standpoint. Sales to Asia comprise 38% of the company’s portfolio with the Americas and Europe accounting for 37% and 25%, respectively.

The company is coming off a first quarter in which adjusted diluted EPS rose by 28.6% on a 1.4% increase in sales versus the year-ago quarter. On a year-over-year basis, automotive and electrical sales increased 8% and 5%, respectively, while electronics sales fell 1%. Other positive developments that transpired during the quarter were the repurchase of $6.6 million worth of Littlefuse shares, the acquisition of a company that supplies high-current ground fault protection devices and a spike in the company’s book-to-bill ratio for electronics.

Analysts are looking for Littlefuse to finish 2008 with EPS of $1.85 on $569 million in revenues. These numbers would represent 12.8% and 6.1% respective increases over the company’s 2007 results. Analysts are then expecting EPS to grow by another 31.4% in 2009 on a 6.2% rise in sales versus expected 2008 results.

As of Tuesday, the company’s stock price was up 10.41% so far this year. This appreciation compares favorably to the S&P 500, which is down 7.4% year-to-date. Despite this market-beating performance, one analyst still believes that . . .

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