CTS Raises 2026 Sales Outlook to $590 Million After Third-Quarter Profit Growth
Key Facts
CTS reported third-quarter 2026 results on October 27, raising its annual sales and earnings-per-share outlook after quarterly sales growth and improved profitability. The company said sales totaled $149.6 million, up 5% from $142.2 million in the year-earlier period. Net income was $17.8 million, or 11.9% of sales, compared with $13.7 million and a 9.6% margin a year earlier. Adjusted diluted earnings per share were $0.77, versus $0.60 in the third quarter of 2025. Diluted earnings per share under accounting standards were $0.61, up from $0.46. The results carry added significance because the company raised both its 2026 sales and earnings outlook ranges at the same time.
CTS raised its fiscal 2026 sales outlook to $580–$590 million from $565–$585 million previously. It also raised its adjusted diluted earnings-per-share outlook to $2.78–$2.88, compared with the previous range of $2.55–$2.70. The new lower end for both sales and earnings per share is above the previous lower end, while the upper end also increased. Analyst estimates cited in a Reuters report via Investing.com put annual revenue consensus at $573.50 million and earnings-per-share consensus at $2.65. The company’s new ranges exceed both figures at their lower ends. The revision puts the company’s outlook above the published annual consensus, after quarterly results also beat quarterly estimates.
The company broke out performance across its end markets: sales in diversified markets rose 7%, and those markets accounted for 60% of total third-quarter sales. Transportation market sales increased 2%, an improvement from a 2% year-over-year decline in the second quarter, according to figures in the first draft of the previous quarter’s results. The third-quarter sales mix indicates that diversified markets made up the largest share of revenue, while transportation returned to growth. CTS has said its acquisition of Millar expands its presence in medical sensing, a field that falls within the company’s business diversification. CTS completed the deal on October 23 for $50 million, net of cash acquired and debt assumed, with additional consideration contingent on meeting financial performance targets. The company said it had sales of about $564 million in the twelve months ended June 30, 2026, before the acquisition was completed.
Margin and cash metrics improved alongside sales growth. Adjusted gross margin rose to 42.2% in the third quarter from 38.9% in the year-earlier quarter. Operating cash flow climbed to $43.5 million, compared with $29.0 million a year earlier. Net income increased to $17.8 million from $13.7 million, while its margin rose to 11.9% from 9.6%. The figures show improvement in adjusted gross margin, net income and operating cash flow, along with an increase in adjusted earnings per share. CTS said in its statement, "Adjusted gross margin was 42.2% compared with 38.9% in the third quarter of 2025, and operating cash flow was $43.5 million compared with $29.0 million."
The results beat published quarterly estimates: a Reuters report via Investing.com said earnings per share were $0.77, versus analysts’ estimate of $0.67. Revenue was $149.58 million, compared with consensus estimates of $145.96 million. The revenue figure in the report differs from the company’s rounded sales figure of $149.6 million. Before the results were released, CTS shares closed at $53.92 on October 26, up 1.62% during the session. That was the last close before the results announcement, which came the following morning. The company said results would be released at about 8:00 a.m. Eastern time on October 27, and that the management call would begin at 10:00 a.m. the same day.