TTM Technologies, Inc. Reports Q3 2024 Financial Results

On October 30, 2024, TTM Technologies, Inc. (NASDAQ: TTMI), a leading global printed circuit board (PCB) manufacturer, reported its financial results for the third quarter of 2024. The company highlighted a revenue increase to $616.5 million, up from $572.6 million in the same quarter the previous year. This growth was attributed to strong demand in the aerospace and defense sectors, which constituted 46% of the revenue, and the data center computing market. TTM Technologies also reported a substantial year-over-year improvement in net income, posting $14.3 million compared to a net loss of $37.1 million in Q3 2023.

Key Takeaways

• TTM Technologies' Q3 revenue rose to $616.5 million, driven by aerospace and defense, and data center computing.
• The company's GAAP net income turned around to $14.3 million from a net loss of $37.1 million in the previous year's quarter.
• Aerospace and defense backlog reached a record $1.49 billion with a book-to-bill ratio of 1.20.
• The company is making strategic investments, including new facilities in Penang, Malaysia, and Syracuse, New York.
• TTM anticipates Q4 net sales between $610 million to $650 million and non-GAAP earnings per diluted share of $0.44 to $0.50.

Company Outlook

• Projected Q4 2024 net sales range from $610 million to $650 million.
• Non-GAAP earnings per diluted share expected to be between $0.44 and $0.50 for Q4.
• The Penang facility is expected to break even by mid-next year, with operating margins in the mid-teens.
• Forecasts beyond Q1 are challenging due to market uncertainties.

Bearish Highlights

• The automotive market remains weak, with only $25 million in program value won last quarter.
• Customer concentration is high in the data center and computing segment, with a reliance on four or five major clients.
• Challenges anticipated in forecasting beyond the next two quarters.

Bullish Highlights

• Record aerospace and defense backlog of approximately $1.49 billion.
• Strong growth in data center computing and aerospace and defense markets.
• Operating income and net income showed significant year-over-year improvement.

Misses

• Despite overall growth, the company reported a 25% decrease in quarterly revenue from the 787 builds.

Q&A Highlights

• Customer interest in the new Penang facility remains high for supply chain resilience.
• The Syracuse expansion is a long-term strategy with minimal financial impact expected in the next fiscal year.
• A recent fire at the Chippewa Falls facility had no material impact on operations.

TTM Technologies' strategic initiatives, such as the expansion of its manufacturing capabilities in Penang and Syracuse, reflect the company's commitment to reducing the cyclical impacts of the market and positioning itself for future growth. With a solid balance sheet and a net debt to EBITDA ratio of 1.4x, the company appears to be on stable financial footing. The upcoming conferences in November and December 2024 will provide additional opportunities for investors to gauge the company's trajectory. Despite challenges in the automotive market and high customer concentration in the data center segment, TTM Technologies' strong performance in aerospace and defense, coupled with significant investments in new technology and facilities, underscores its strategic focus on long-term growth and market resilience.

InvestingPro Insights

TTM Technologies' recent financial performance aligns with several key metrics and insights from InvestingPro. The company's Q3 2024 results, showing increased revenue and a turnaround to profitability, are reflected in InvestingPro's data, which indicates that TTM has been profitable over the last twelve months with a revenue of $2,316.87 million.

An InvestingPro Tip highlights that net income is expected to grow this year, which corresponds with the company's improved financial results and positive outlook for Q4 2024. This growth expectation is further supported by the fact that two analysts have revised their earnings upwards for the upcoming period, suggesting confidence in TTM's near-term performance.

The company's strong performance in aerospace and defense, which now constitutes 46% of revenue, is mirrored in InvestingPro's data showing a significant 71.63% price total return over the past year. This impressive return aligns with another InvestingPro Tip noting that TTM is trading near its 52-week high, with the current price at 95.85% of the 52-week high.

While the article mentions challenges in forecasting beyond the next two quarters, InvestingPro data shows that TTM's liquid assets exceed short-term obligations, indicating a solid financial position that could help navigate market uncertainties.

It's worth noting that InvestingPro offers 11 additional tips for TTM Technologies, providing investors with a more comprehensive analysis of the company's financial health and market position. For those seeking a deeper understanding of TTM's investment potential, exploring these additional insights on InvestingPro could be valuable.