What Happened?
Shares of global electronics contract manufacturer Kimball Electronics (NYSE: KE) jumped 8.7% in the morning session after the company reported second-quarter 2025 earnings and revenue that significantly surpassed analyst expectations. The electronics manufacturer posted adjusted earnings per share of $0.34, which was 83.8% higher than Wall Street estimates. Revenue for the quarter came in at $380.5 million, also beating consensus forecasts by 14.2%. This strong outperformance likely caught investors' attention, as the results were better than feared. The positive surprise came even as sales fell 11.6% from the same period last year, reflecting a broader cyclical downturn in the Electrical Systems industry. However, looking ahead, analysts project that both revenue and earnings will decline over the next twelve months.
The shares closed the day at $24.71, up 17.7% from previous close.
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What Is The Market Telling Us
Kimball Electronics’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was about 1 year ago when the stock dropped 15.4% on the news that the company reported weak second-quarter results, with revenue and EPS falling below expectations. Notably, net sales in the automotive vertical, its largest segment, fell 9% year on year, driven by "continued weak demand in Europe, incremental softness in North America, and a decline in China." Guidance was also weak as its full-year revenue guidance missed. Management highlighted that the guidance includes expectations for continued macro weaknesses till fiscal 2025 based on early indications from customers. Overall, this was a weaker quarter.
Kimball Electronics is up 34.4% since the beginning of the year, and at $24.71 per share, has set a new 52-week high. Investors who bought $1,000 worth of Kimball Electronics’s shares 5 years ago would now be looking at an investment worth $1,778.
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