Key Takeaways:
Kimball Electronics, Inc. (NASDAQ:KE) reported adjusted third-quarter earnings of $0.33 per share, missing the Zacks Consensus Estimate of $0.39, though net sales of $352.9 million showed sequential growth over the prior quarter.
"Results for the third quarter were in line with expectations," Richard D. Phillips, the company's Chief Executive Officer, said in a statement. "Sales increased sequentially compared to Q2, driven by strong growth in our medical vertical market, margins remained solid, and cash from operations was positive for the ninth consecutive quarter."
The electronics manufacturing services company saw revenue decline 6 percent from the $374.6 million reported in the same quarter last year. Net income for the quarter was $5.7 million, or $0.23 per diluted share, an increase from the $3.8 million, or $0.15 per diluted share, in the third quarter of fiscal 2025.
Despite the earnings miss, Kimball affirmed its guidance for the full fiscal year 2026. The company continues to expect net sales between $1.40 billion and $1.46 billion and anticipates its adjusted operating margin will be at the high end of its 4.2 to 4.5 percent range.
Sales in the company's automotive segment, its largest vertical, decreased 3 percent year-over-year to $160.5 million. The medical vertical reported sales of $106.1 million, an 8 percent decrease that was impacted by a large non-recurring sale in the prior-year period. The industrial vertical saw an 8 percent sales decline to $86.3 million.
The decision to affirm full-year guidance suggests management is confident in a strong finish to the fiscal year, driven by continued demand in the medical market. Investors will look to the company's fourth-quarter results for confirmation of this trend and execution on its margin targets.
This article is for informational purposes only and does not constitute investment advice.
