From the CEO: Rogers Announces Q3 2016 Financials
Selected quotes from our recent earnings call.Read the corporate financials news release: Rogers Reports Sales of $165.3 Million in Q3
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.