CTS Corporation reported second-quarter 2026 revenue growth and record adjusted profitability. The company also raised its full-year 2026 outlook.
Adjusted diluted earnings per share reached a record $0.74, up about 30% from $0.57 in the prior-year quarter, according to the company's earnings release. Chief Financial Officer Ashish Agrawal said the quarter included approximately $0.07 per share of favorable effects from foreign currency movements and a larger customer reimbursement.
Performance in diversified markets
Diversified end-market sales increased 15% year over year and accounted for 59% of total revenue, compared with 55% a year earlier. Medical revenue totaled $28 million, rising 45% from a year earlier and 14% sequentially. Chief Executive Officer Pratik Trivedi attributed the increase to broad demand for sensing and actuation technologies used in advanced diagnostics and therapeutic treatments. The medical segment recorded a book-to-bill ratio of 1.21. Trivedi said capacity expansion intended to support medical demand was already in place.
Industrial sales increased 16% year over year and 6% sequentially to $40 million. The segment's book-to-bill ratio was 1.11. CTS added two customers in process instrumentation and cryogenic nanopositioning applications, and cited design wins involving distribution components, industrial printing, EMI filters, temperature sensing, heat pumps, refrigeration, and pool and spa systems.
Aerospace and defense sales were $18 million, down 15% from the prior-year quarter but up 4% sequentially. CTS said the year-over-year decline primarily reflected the timing of program funding and government contract awards. The segment posted a 1.23 book-to-bill ratio. CTS added a customer focused on defense satellite communications. Trivedi said government funding had begun to flow into several key programs, supporting increased customer activity.
Transportation and outlook
Transportation sales were $59 million, down 2% both year over year and sequentially. CTS secured approximately $163 million in new transportation business awards during the quarter, including a roughly $100 million sensor award from a major North American original equipment manufacturer for an integrated wheel-speed accelerometer sensing application. Total booked transportation business stood at approximately $1.2 billion at quarter-end, up about $100 million from the first quarter. Agrawal said transportation book-to-bill generally remains close to 1 because customer orders in that market are short cycle.
CTS raised its full-year 2026 outlook, assuming sales of $565 million to $585 million and adjusted diluted EPS of $2.55 to $2.70. Trivedi said diversified-market growth is expected to continue across medical, aerospace and defense, and industrial. For transportation, CTS expects global light-vehicle production to be flat to modestly down amid tariff, geopolitical and consumer-demand uncertainty. The company said it does not anticipate a material impact from recent tariff announcements but continues to monitor Section 232 tariff changes, precious-metal inflation, and other input-cost pressures. Agrawal said CTS is working with customers and suppliers on pricing and cost recovery, with the range in guidance reflecting potentially different outcomes from those discussions.