Knowles Corporation's Q4 2024: Navigating Pricing Pressures, Production Challenges, and Industrial Trends

These are the key contradictions discussed in Knowles Corporation's latest 2024 Q4 earnings call, specifically including: Pricing Pressure and Inventory Levels, Specialty Film Production Issues, and Industrial Segment Performance:



Revenue and Earnings Performance:
- Knowles Corporation reported fourth-quarter 2024 revenue of $143 million, within the guided range, and non-GAAP diluted EPS of $0.27.
- The revenue and earnings shortfall to the midpoint in Q4 was driven by challenges in plant consolidation and ramping production of new products within the specialty film capacitor line.

Segment Growth and Market Dynamics:
- MedTech and Specialty Audio revenue grew 9% sequentially but was flat on a year-over-year basis in Q4, with a full-year 2024 revenue growth of 8%.
- The growth was driven by partnering with customers to create innovative solutions and leveraging fixed overhead.

Precision Device Segment Challenges and Opportunities:
- Precision Device segment Q4 revenues grew 4% year-over-year, with a $3 million shortfall due to production transfer delays and new product ramps.
- The segment received a large order from an energy sector customer valued at more than $75 million, with at least $25 million expected to ship in 2026.

Cash Flow and Financial Health:
- Knowles generated $35 million in cash from operating activities in Q4 and $130 million for the full year 2024.
- The strong cash flow allows for capitalizing on M&A opportunities and returning capital through share buybacks, with the Board authorizing an additional $150 million in capacity.