Littelfuse Inc. (NASDAQ:LFUS) Q4 2019 Earnings Conference Call - Final Transcript
Jan 29, 2020 • 10:00 am ET
during a period of soft demand reinforces the strength of our balance sheet, confirms our commitment to deliver ongoing value to our stakeholders.
Since late in 2018, we have seen a volatile global economic environment, impacting the end markets that we serve. In response to uncertain demand, electronics channel partners and end customers have been rebalancing inventory and automotive manufacturers have lowered production. These conditions impacted volumes within our electronics and automotive segments during 2019. Across our electronics product segment, our fourth quarter sales were generally in line with our expectations. During the quarter, we continue to see inventory destocking with distribution, EMS and OEM partners as end market demand appeared to bottom. As a result, inventory levels in the electronics channel dropped meaningfully and are now approaching the mid-point of the normal range and our electronics book-to-bill exiting in the fourth quarter was above 1.0. These improvements suggest that sell into distribution should begin to align with sell-through by the end of the first quarter and we expect modest sequential recovery through 2020.
Our deep strategic relationships with our channel partners remain a significant factor at our long-term best across our electronics product segment. And we view our distribution partners as an extension of our global sales teams. While this exposes us the greater sales volatility given more than 75% of sales in this segment are fulfilled through distribution, these valuable relationships jointly drive demand in customer partnership and profitable growth as we execute our strategy and serve more than 100,000 end customers every quarter.
Fourth quarter sales from our automotive product segment were also generally in line with our expectations. Sales levels continue to reflect an ongoing global car build decline, which was down mid-single digits compared to last year. Our passenger car fuse business, which was impacted by the GM strike, outperformed the global car build due to increasing content related to the electrification of vehicles. This growth was offset by customer program delays in our sensor business and softness in our commercial vehicle business.
As we work through this period of soft end market demand, we continue to focus on profitability improvement for the automotive product segment. We made significant progress this year and achieved double-digit operating margins during the quarter and for the full year. Later, Meenal will provide an update on our momentum. We expect first quarter global car production to be down low-single digit and for the full year 2020, we expect global car production to be modestly down.
Our industrial products segment continues to deliver strong performance. In the fourth quarter, we exceeded end market growth and achieved organic growth of 7%. We also achieved an operating margin of 22%, above recent performance. These results were driven by our continued operational execution and strength across a broad range of industrial applications, including renewable energy and power conversion. We are confident this business will continue to drive long-term profitable growth.
During 2019, we executed several strategic initiatives, we secured key design wins in