Knowles Q2 revenue of $201.7M missed the $210M consensus. Hearing health revenue dropped 8% YoY. Q3 guidance midpoint for revenue and margin both came in below analyst expectations.
Alpha Score of 40 reflects weak overall profile with moderate momentum, poor value, moderate quality, moderate sentiment.
Knowles Corp. reported second-quarter revenue of $201.7 million, below the $210 million consensus estimate, and adjusted earnings of 28 cents a share that matched analyst expectations. The audio and precision-components maker cited weak demand in its hearing health and specialty audio segments, which together account for roughly 60% of revenue.
The company guided third-quarter revenue to $195 million to $215 million, with the midpoint below consensus. Adjusted gross margin guidance for the quarter was set at 43% to 44%, down from the 45% reported in Q2, reflecting higher input costs and a less favorable product mix.
Knowles' hearing health segment, its largest, saw revenue fall 8% from a year earlier to $85 million. The company attributed the decline to inventory destocking at major customers and a slower-than-expected ramp in new product launches. The specialty audio segment posted $68 million in revenue, down 4% year over year, pressured by softness in consumer electronics end markets.
The precision devices segment was a relative bright spot, with revenue up 6% to $48.7 million, driven by demand in medical and industrial applications. Segment margins held at 34%.
Chief Executive Officer Jeffrey Niew said the company is "taking steps to align costs with the current demand environment" and expects the hearing health headwinds to persist through the end of the year. The company did not provide a formal full-year outlook.
Shares of Knowles were flat in after-hours trading following the release. The stock has fallen about 18% year to date through Friday's close.
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