Kimball Electronics 2025 Q3 Earnings Return to Profitability with Net Income Up 162.8%

Kimball Electronics(KE) reported its fiscal 2025 Q3 earnings on May 07th, 2025. Kimball Electronics surpassed expectations in its fiscal third quarter, reporting a return to profitability with net income increasing by 162.8% compared to the previous year. The company maintained its previous guidance, expecting to achieve sales and operating income at the high end of its guidance range for fiscal 2025. Kimball Electronics continues to demonstrate its ability to navigate challenging market conditions effectively.

Revenue

Kimball Electronics reported a revenue decline of 11.9% in fiscal 2025 Q3, totaling $374.61 million compared to $425.04 million in the previous year.

Earnings/Net Income

Kimball Electronics returned to profitability with an EPS of $0.15 in 2025 Q3, compared to a loss of $0.24 per share in 2024 Q3, marking a 162.5% positive change. The company made a significant turnaround with a net income of $3.82 million, a 162.8% positive swing from the net loss of $6.08 million in 2024 Q3. This indicates a positive earnings outlook.

Price Action

The stock price of Kimball Electronics has jumped 12.55% during the latest trading day, surged 28.17% during the most recent full trading week, and has increased 38.40% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Kimball Electronics shares post-revenue increases and holding them for 30 days has yielded mixed results over the past five years. This strategy produced a compound annual growth rate (CAGR) of 1.2%, which falls below the overall market CAGR of 7.5% during the same period. Although the approach provided some modest returns, it did not match the broader market performance. This suggests that while the company has shown some positive movement in its stock price following earnings reports, the gains have been relatively modest compared to the market as a whole.

CEO Commentary

"I'm proud of the results for the third quarter and our team’s ability to navigate an environment of uncertainty, while focusing on what is controllable," stated Richard D. Phillips, Chief Executive Officer. Q3 sales met expectations, and margins improved sequentially. Positive cash flow was recorded for the fifth consecutive quarter, and debt borrowings decreased by 45% from peak levels. The company has sufficient liquidity for short-term challenges and plans to invest strategically. The addition of a new manufacturing facility in Indianapolis underscores the commitment to growth and expanding the medical CMO strategy.

Guidance

Kimball Electronics expects to achieve sales and operating income at the high end of its guidance range for fiscal 2025, projecting net sales between $1.40 billion and $1.44 billion, with adjusted operating income anticipated at 3.4% to 3.6% of net sales. Capital expenditures are estimated to be at the low end of the range, between $40 million and $50 million.

Additional News

Recently, Kimball Electronics completed the acquisition of a new manufacturing facility in Indianapolis, focusing on expanding its medical industry operations. This strategic move is aimed at enhancing the company's CMO strategy and supporting its growth in the healthcare sector. In addition, the company announced a share repurchase program worth $3.0 million, acquiring 175,000 shares of common stock. These developments highlight Kimball Electronics' commitment to growth and value creation for its shareholders. The leadership team remains focused on capitalizing on new opportunities to strengthen its market position.