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Knowles Provides Preliminary Results, Hit Hard by Coronavirus
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Knowles Corporation (KN - Free Report) yesterday issued preliminary results for first-quarter 2020. The Itasca, IL-based company expects the coronavirus pandemonium to have a greater impact than it had anticipated while providing its outlook for the March quarter on Feb 4.
The company now expects revenues to be $163 million, which was previously estimated in the range of $160-$190 million. It anticipates a loss per share (from continuing operations) between 12 cents and 16 cents. Non-GAAP earnings are expected in the range of 0-4 cents per share, which was previously projected between 8 cents and 16 cents.
On Apr 6, Knowles announced a change in location for its annual meeting of shareholders to a virtual format only. Due to the public health impact of the virus as well as to support well-being of its shareholders, employees and their families, the company will hold the meeting virtually through live webcast.
In the preceding quarter, COVID-19 caused significant disruptions within Knowles’ manufacturing operations across Asia that impacted productivity within the Audio segment. The company has made progress in returning its China facilities to normalcy but saw lower-than-expected labor productivity as well as factory utilization in Malaysia and the Philippines.
That said, a strong balance sheet and diversified customer base and end markets will likely help Knowles to stay afloat during these struggling times. It will continue to invest in an effort to support future growth when market-recovery kicks in. We will get a clearer picture of the state of affairs once the company reports its results on May 4.
Knowles intends to capitalize on its capabilities in digital signal processing and algorithms to enable users engage with technology across the Ear and IoT platforms. The company boasts an integrated design and manufacturing that enables it to have flexibility as well as quick time-to-market schedule to meet customers’ needs.
However, soft trend in the Mobile market with weakness in the premium portion of the Android ecosystem is a major headwind for the company's audio business. The Precision Devices segment is also seeing weak industrial demand for capacitors and shipment timings for mmWave filters.
Knowles has a long-term earnings growth expectation of 10% compared with 17.6% of the industry. Its shares have lost 32.7% compared with the industry’s decline of 20.7% in the past six months.
Knowles has a trailing four-quarter positive earnings surprise of 2.9%, on average. The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters. The stock is currently trading with a forward P/E of 12.4X.
Ooma has a trailing four-quarter positive earnings surprise of 124%, on average.
Viavi has a trailing four-quarter positive earnings surprise of 11.7%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.
Plantronics has a trailing four-quarter positive earnings surprise of 27.7%, on average. The company’s earnings topped the consensus mark in three of the last four quarters.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Knowles Provides Preliminary Results, Hit Hard by Coronavirus
Knowles Corporation (KN - Free Report) yesterday issued preliminary results for first-quarter 2020. The Itasca, IL-based company expects the coronavirus pandemonium to have a greater impact than it had anticipated while providing its outlook for the March quarter on Feb 4.
The company now expects revenues to be $163 million, which was previously estimated in the range of $160-$190 million. It anticipates a loss per share (from continuing operations) between 12 cents and 16 cents. Non-GAAP earnings are expected in the range of 0-4 cents per share, which was previously projected between 8 cents and 16 cents.
On Apr 6, Knowles announced a change in location for its annual meeting of shareholders to a virtual format only. Due to the public health impact of the virus as well as to support well-being of its shareholders, employees and their families, the company will hold the meeting virtually through live webcast.
In the preceding quarter, COVID-19 caused significant disruptions within Knowles’ manufacturing operations across Asia that impacted productivity within the Audio segment. The company has made progress in returning its China facilities to normalcy but saw lower-than-expected labor productivity as well as factory utilization in Malaysia and the Philippines.
That said, a strong balance sheet and diversified customer base and end markets will likely help Knowles to stay afloat during these struggling times. It will continue to invest in an effort to support future growth when market-recovery kicks in. We will get a clearer picture of the state of affairs once the company reports its results on May 4.
Knowles intends to capitalize on its capabilities in digital signal processing and algorithms to enable users engage with technology across the Ear and IoT platforms. The company boasts an integrated design and manufacturing that enables it to have flexibility as well as quick time-to-market schedule to meet customers’ needs.
However, soft trend in the Mobile market with weakness in the premium portion of the Android ecosystem is a major headwind for the company's audio business. The Precision Devices segment is also seeing weak industrial demand for capacitors and shipment timings for mmWave filters.
Knowles has a long-term earnings growth expectation of 10% compared with 17.6% of the industry. Its shares have lost 32.7% compared with the industry’s decline of 20.7% in the past six months.
Knowles has a trailing four-quarter positive earnings surprise of 2.9%, on average. The company’s earnings beat the Zacks Consensus Estimate in two of the last four quarters. The stock is currently trading with a forward P/E of 12.4X.
Knowles currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the industry include Ooma, Inc. (OOMA - Free Report) , Viavi Solutions Inc. (VIAV - Free Report) and Plantronics, Inc. . While Ooma sports a Zacks Rank #1 (Strong Buy), Viavi and Plantronics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ooma has a trailing four-quarter positive earnings surprise of 124%, on average.
Viavi has a trailing four-quarter positive earnings surprise of 11.7%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.
Plantronics has a trailing four-quarter positive earnings surprise of 27.7%, on average. The company’s earnings topped the consensus mark in three of the last four quarters.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>