Richardson Electronics Ltd (NASDAQ:RELL) stock fell 12.82% (As on January 8, 11:21:17 AM UTC-4, Source: Google Finance) after the company misses the earning expectations for the second quarter of FY 25. Backlog totaled $142.6 million at the end of the second quarter of fiscal 2025 versus $137.4 million at the end of the first quarter of fiscal 2025. The sequential increase was primarily in GES with a small increase in Canvys. The Company’s sales pipeline remains robust, and while the timing of orders can vary quarter-to-quarter, management expects backlog to continue to strengthen in fiscal 2025. Gross margin for the second quarter was 31.0% of net sales compared to 28.4% during the second quarter of fiscal 2024. Richardson Healthcare’s gross margin improved to 35.7%, up from 14.8%, as a result of an improved product mix and manufacturing efficiencies. GES gross margin increased to 32.0% from 29.2% due to product mix. PMT also posted an increase in gross margin to 30.3%, compared to 28.5%, due to favorable product mix. Canvys gross margin decreased to 31.7% from 33.5% primarily due to higher freight costs. Operating loss was $0.7 million for the second quarter of fiscal 2025, compared to an operating loss of $2.0 million in the prior year’s second quarter.

RELL in the second quarter of FY 25 has reported the adjusted loss per share of 5 cents, missing the analysts’ estimates for the adjusted loss per share of 2 cents. The company had reported the adjusted revenue growth of 12.1 percent to $49.5 million in the second quarter of FY 25 from $44.1 million in the prior year’s second quarter. Year-over-year net sales growth for the second quarter of fiscal 2025 was due to higher sales in GES and the Power and Microwave Technologies Group (PMT). GES sales increased $3.4 million, or 129.0% from last year’s second quarter driven by higher sales of wind turbine battery modules. PMT sales increased $3.1 million, or 9.9% from the second quarter of fiscal 2024 primarily because of higher demand from the Company’s semiconductor wafer fab customers. Sales growth for the second quarter of fiscal 2025 was partially offset by a $0.7 million, or 22.8% decrease in Healthcare sales due to lower CT tube, system and parts demand. Canvys sales also declined year-over-year by $0.4 million or 6.0%, reflecting challenging market conditions in Europe.