Selected quotes from our recent earnings call. Read the corporate financials news release: Rogers Corporation Reports Third Quarter 2016 Results
In Q3 2016, Rogers achieved net sales of $165.3 million, exceeding our previously announced guidance. This is an increase of 3.1% over Q3 2015. During the quarter, we experienced continued demand for e-mobility applications as well as positive growth in general industrial, clean energy, and portable electronics. In general, we are pleased with the trends in a number of the markets where Rogers has significant share.
Bruce Hoechner, CEO, on Innovation Leadership
In the area of innovation leadership, we are pleased with the advancements we are making in innovation — in our innovation centers as well as in the operating units where our R&D teams are focused on next-generation solutions. Growing organically and through synergistic M&A remains a key focus for the Company. We have a number of projects underway within our operational excellence initiatives. I was pleased to attend the recent grand opening of the ROLINX Power Distribution Bus Bar Line at our Rogers Hungary Facility.
Bruce Hoechner, CEO, on Megatrends
We believe the longer-term outlook and corresponding growth expectations for our key markets remain positive over the next two to three years. Global requirements are driving demand for applications in Rogers three key megatrend categories of internet connectivity, clean energy, and safety and protection, which consistently account for the majority of our net sales. We remain confident that we are focused on the right global growth markets.
Bruce Hoechner, CEO, on Rogers’ Business Units
Advanced Connectivity Solutions delivered net sales of $65.5 million during Q3 2016, which is a decrease of 1% from Q3 2015. Our Q3 ACS results were driven by demand in applications for high frequency circuit materials used in automotive safety and other high reliability applications. Growth in ACS was more than offset by lower demand in aerospace and defense applications and wireless telecom.
Within wireless telecom, our strong performance in transceiver power amps was significantly offset by weaker demand in our 4G LTE antenna materials, primarily as a result of a delay in the India 4G spectrum auction, which is now complete, design changes by a specific antenna OEM that impacted circuit material usage versus previous designs, and the impact of price considerations offered by Rogers for longer term buy-in stability. We do expect to see improvement in the near term as India starts to deploy more base stations and as Rogers continues to penetrate the global antenna market more broadly.
Elastomeric Material Solutions achieved all-time record quarterly net sales of $54.4 million, an increase of 16.3% from Q3 2015. During the quarter, EMS results were driven by an increase in demand for portable electronics, e-mobility, and general industrial applications, which more than offset lower demand for mass transit and consumer applications. The continued penetration of the back pad solution for portable electronics and government subsidies for e-mobility solutions contributed to EMS’s success during the quarter.
We are pleased with the rebound we have seen in EMS over the past two quarters. Our strategy to drive growth through geographic expansion has been evident as European and Asia regions delivered revenue increases in Q3. We saw particular strength in China where government mandates and consumer demand are driving adoption of e-mobility applications.
EMS’ R&D efforts are helping us expand our portfolio of opportunities. For example, as more smartphone designs transition to OLED displays, we have been working with our customers to develop back pad products specifically designed to meet their more demanding requirements, creating new opportunities for EMS. In Q3, we were pleased with the renewed strength in the portable electronic market.
Power Electronics Solutions net sales were $39.8 million, an increase of 8.8% over Q3 2015. Third quarter results were favorably impacted by increased demand in e-mobility, energy efficient motor drives, certain renewable energy and vehicle electrification applications. These increased were partially offset by much lower demand in rail, energy, and mining applications.
For the PES business, we maintain a positive outlook for the mid and long-term. We saw during Q3, government mandates and climate change agreements are contributing to increased demand for energy efficient motor drives, renewable energy applications, and EV/HEV content.
Q3 2016 Earnings Call Full Transcript:
Q3 2016 Financials Press Release:
Q3 2016 Earnings Call Slides:
Selected quotes from our second quarter earnings call.
Read the corporate financials news release: Rogers Corporation Reports Second Quarter 2016 Results
In Q2 2016, Rogers achieved net sales of $157.5 million, in line with our stated guidance. Net sales declined 3.4% in comparison to Q2 2015. We experienced slower than expected growth in certain key markets, but we maintain confidence in the long-term growth prospects for our core markets and will continue to execute our growth strategy to capitalize on the opportunities ahead.
Bruce Hoechner, CEO, on Growth
Our roadmap has enabled us to deliver solid results and positions us for the projected growth in our megatrend markets. Rogers is a market-driven organization and we leverage our deep understanding of the link between our markets and technology to develop solutions that fill unmet needs in the marketplace. We recently hosted a day-long innovation event where we brought together Rogers engineers and a key customer’s top technologists. These events deepen our customer partnerships so together we can develop a roadmap to meet their future technology needs.
In the area of innovation leadership, we are very pleased with the advancements we are making in our innovation centers, as well as in the operating units where our R&D teams are focused on next-generation solutions. Our approach to partnering with local universities in the US and Asia is yielding results. We are filing for new patents in record numbers and we are evaluating a robust pipeline of groundbreaking new technology platforms at our innovation centers.
Bruce Hoechner, CEO, on Megatrends
The longer-term outlook and corresponding growth expectations for our key markets remains positive over the next two to three years. For example, consumer demand for mobile video content is expected to drive a 45% compounded annual growth rate in mobile data traffic over the next five years. To support that explosive growth, the FCC recently voted to open high-frequency spectrum for 5G networks in the US. Such actions bode well for Rogers since our core strengths in advanced antenna technology, power amps, and other wireless telecommunication components should enable us to capitalize on that growth.
Other areas of importance to Rogers are energy efficiency and safety, which continue to be at the forefront of technology advancements across many markets. In particular, we expect to see solid growth for EV/HEV and automotive safety system applications going forward.
We are confident that the strategic investments we are making will drive greater agility and flexibility in the face of market uncertainty.
Advanced Connectivity Solutions delivered net sales of $67.2 million during Q2 2016, which is an increase of 1.2% over Q2 2015. Results were driven by demand in applications for high-frequency circuit materials used in automotive safety and other high-reliability applications.
Demand for wireless telecom applications was up slightly, but lower than expected, due to delayed spending in both India and China, which we expect to occur now in 2017. This resulted in a gradual softening of demand as we moved through the quarter. Growth in ACS was partially offset by lower demand in satellite TV dish applications.
We are executing on our strategy to deliver growth in ACS. In the near term, we expect to maintain our leadership position in 4G LTE wireless infrastructure, as well as in automotive safety systems where manufacturers are offering more of these features across luxury and mass-market models. We are well positioned to capitalize on the growth we expect to see with the buildout of the 5G networks.
Elastomeric Material Solutions achieved second-quarter net sales of $45.8 million, a decrease of 2.6% from Q2 2015. During the quarter, EMS results were driven by an increase in demand for portable electronics and automotive applications. This demand was offset by lower demand for general industrial, mass transit, and consumer applications. Softness in the general industrial market was a result of reduced capital expenditures in North America, due in part to the decline in energy-related infrastructure investments. EMS’s consumer category was affected by lower demand for protective footwear, due to slowdowns in the mining and construction categories.
Our strategy to drive growth in EMS through geographic expansion was evident during the quarter, as the European region delivered another quarter of double-digit revenue growth. In addition, our R&D efforts are helping us to expand our portfolio of opportunities. For example, we are pleased with the traction we are gaining for our new back pad materials, which eliminate the ripple effect that can appear on the screens of certain portable electronic devices.
Power Electronics Solutions net sales were $38.4 million, essentially flat compared to Q2 2015. Overall, we saw increased demand for energy-efficient motor drives, due to strong results at one of our key customers. In addition, certain renewable energy and vehicle electrification applications also posted solid growth during the quarter. Demand for EV/HEV was essentially flat, due to a slower than expected ramp-up rate at a key customer in Q2, but we expect to see improvement in Q3. The positive results in these segments was more than offset by weaker demand in mass transit, where rail demand was much lower due to declines in energy and mining markets.
For the PES business, we maintain a positive outlook for the mid- to long term. We expect government mandates and climate change agreements to continue to drive demand for energy-efficient motor drives, renewable energy applications, and EV/HEV content.
Q2 2016 Earnings Call Full Transcript: http://rogerscorp.com/documents/8792/investor-relations/Rogers-Corporation-Second-Quarter-2016-Conference-Call.pdf
Q2 2016 Financials Press Release: http://rogerscorp.com/news/7466/Rogers-Corporation-Reports-Second-Quarter-2016-Results.aspx
Rogers Corporation (NYSE: ROG) plans to announce results for Q1 2016 after the close of trading on Monday, May 2, 2016. A copy of the release will be available at www.rogerscorp.com/news.
All interested parties are invited to participate in Rogers’ quarterly teleconference to be held on Tuesday, May 3, 2016 at 9:00 am ET. Bruce D. Hoechner, President and CEO, and members of senior management will review the results and then respond to questions.
To participate in the teleconference, please call 1-800-574-8929 toll free in the U.S. or 1-973-935-8524 from outside of the U.S. There is no passcode for the teleconference.
For interested parties who do not wish to ask questions, the call is being webcast live by Thomson Reuters and may be accessed at www.rogerscorp.com/ir.
A slide presentation will be made available prior to the start of the call. The slide presentation may be accessed at www.rogerscorp.com/ir.
If you are unable to participate during the live teleconference, the call will be archived until Monday, May 9, 2016. The audio archive can be accessed by calling 1-855-859-2056 in the U.S. or 1-404-537-3406 from outside the U.S. The passcode for the audio replay is 87264976. To access the archived audio online, please visit the Rogers Corporation website and click on the webcast link.