Surge Components Q3 sales fall on lower customer volumes
SPRS•Surge Components reported Q3 net sales of $10.10 million and gross profit of $2.70 million, both down year over year. Earnings per share fell to $0.04 from $0.08, and the company anticipates continued customer pressure for price reductions that may affect margins.
1. Quarterly results
Surge Components said Q3 sales declined year over year to $10.10 million, citing lower volumes from certain customers. Gross profit fell to $2.70 million, with a gross margin of 27.1%, while earnings per share dropped to $0.04 from $0.08.
2. Factors and outlook
The company attributed lower gross profit to decreased business with existing customers and sales of lower-margin products. Selling expenses increased as it hired more sales personnel and paid higher commissions. Surge Components anticipates ongoing customer pressure for price reductions, which may impact margins.
