Q1 2024 Knowles Corp Earnings Call Transcript
Key Points
- Knowles Corp (KN) reported Q1 revenue of $196 million, surpassing the midpoint of their guidance, indicating strong market demand and effective business strategies.
- Earnings per share (EPS) reached $0.20, at the high end of the guided range, reflecting improved operational efficiency and profitability.
- Significant revenue growth in the MedTech and specialty audio segment, up 26% year-over-year, driven by robust market conditions and successful product adoption.
- Precision Device segment saw a 38% revenue increase from the previous year, largely due to the strategic acquisition of Cornell CornellCookson, which is expected to continue contributing to growth.
- Consumer MEMS microphone business experienced a 44% increase in revenue, indicating recovery and growth in this segment.
- Despite overall growth, the Precision Devices segment faced challenges with high inventory levels in distribution and industrial end markets, which could impact short-term growth.
- Gross margins in the Precision Devices segment declined by 1,100 basis points due to lower factory capacity utilization and costs associated with the Cornell acquisition.
- Increased interest expenses by $4 million compared to the previous year, largely due to the Cornell acquisition, which could affect net profitability.
- The strategic alternatives process for the Consumer MEMS Microphone business is taking longer than expected, creating uncertainty for stakeholders.
- While revenue is increasing, the company noted excess share inventory in the Precision Devices segment, which could negatively impact demand and financial performance in upcoming quarters.
Thank you for standing by, and welcome to the first quarter 2024 Knowles Corporation earnings conference call. All lines have been placed on mute to prevent any background noise After the speakers' remarks, there will be a question and answer session. (Operator Instructions) Thank you. I would now like to turn the call over to Sarah Cook. Please go ahead.
Thank you and welcome to our Q1 2024 earnings call. I'm Sarah Cook, Vice President of Investor Relations. And presenting with me today are Jeffrey new, our President and CEO, and John Anderson, our Senior Vice President and CFO.
Our call today will include remarks about future expectations, plans and prospects for Knowles, which constitute forward-looking statements for purposes of the Safe Harbor provisions under applicable federal securities laws. Forward-looking statements in this call will include comments about demand for company product, anticipated trends and company sales expenses and profits, and involve a number of risks and uncertainties that could cause actual
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