Knowles (NYSE:KN) Posts Earnings Results, Beats Expectations By $0.02 EPS

Key Points

• Knowles beat quarterly expectations: EPS was $0.38 versus the $0.36 consensus, while revenue rose 20% year over year to $184 million, exceeding estimates of $172.1 million.
• Precision Devices drove growth: Revenue increased 33% to $117 million, supported by strong demand and a 1.5 book-to-bill ratio. Management expects 2026 revenue growth of 16% and adjusted EBITDA growth of 24%.
• Capacity constraints may temper near-term performance: Limited capacity is expected to restrict Precision Devices growth in early 2027, while the end of a low-margin stamping program will pressure MSA revenue; shares fell to $33.33 after the results.

Knowles (NYSE:KN - Get Free Report) issued its quarterly earnings results on Thursday. The communications equipment provider reported $0.38 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.36 by $0.02, FiscalAI reports. The business had revenue of $184.00 million during the quarter, compared to analysts' expectations of $172.10 million. Knowles had a return on equity of 11.45% and a net margin of 10.63%.

Here are the key takeaways from Knowles' conference call:

• Q3 results exceeded guidance, with revenue up 20% year over year to $184 million, EPS of $0.38, and operating cash flow of $45 million. Management now expects 2026 revenue growth of 16% and adjusted EBITDA growth of 24%.
• Precision Devices revenue rose 33% to $117 million, supported by broad demand across medical, defense, industrial, and electrification markets. The segment posted a 1.5 book-to-bill ratio, nearly $180 million of Q3 orders, and a robust backlog.
• Knowles plans to add capacity across most Precision Devices product lines, with initial capacity expected online in late Q1 and full availability in the second half of 2027. The company also sees a path to expanding adjusted EBITDA margins from above 25% in 2026 to approximately 30% within two to three years.
• Management expects several newer growth platforms—including Micro Solutions Group, pulse-power capacitors, attenuators, inductors, and follow-on energy applications—to expand its addressable market beyond the core business. Micro Solutions revenue is projected to exceed $5 million in 2027 and $10 million in 2028.
• Capacity constraints are expected to limit sequential growth in Precision Devices during early 2027, while the end of a low-margin stamping program creates a 2%–3% headwind for MSA revenue, particularly in the first half. Management expects total revenue to be only slightly down sequentially in the March quarter despite strong year-over-year growth.

Knowles Price Performance

NYSE KN traded down $1.59 on Thursday, hitting $33.33. 1,182,155 shares of the company's stock were exchanged, compared to its average volume of 835,996. The stock has a 50-day moving average of $35.95 and a 200-day moving average of $35.84. The stock has a market cap of $2.85 billion, a price-to-earnings ratio of 43.29 and a beta of 1.59. Knowles has a 52 week low of $20.57 and a 52 week high of $42.93. The company has a current ratio of 3.20, a quick ratio of 1.75 and a debt-to-equity ratio of 0.16.

Insider Buying and Selling at Knowles

In other news, Director Cheryl Shavers sold 6,618 shares of Knowles stock in a transaction on Monday, August 17th. The stock was sold at an average price of $39.27, for a total value of $259,888.86. Following the transaction, the director owned 35,723 shares in the company, valued at approximately $1,402,842.21. This trade represents a 15.63% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, SVP Raymond Cabrera sold 6,178 shares of the business's stock in a transaction on Monday, July 27th. The stock was sold at an average price of $36.28, for a total value of $224,137.84. Following the transaction, the senior vice president directly owned 127,945 shares of the company's stock, valued at $4,641,844.60. This trade represents a 4.61% decrease in their position. The disclosure for this sale is available in the SEC filing. Company insiders own 2.24% of the company's stock.

Analyst Ratings Changes

A number of equities analysts have commented on the company. Robert W. Baird set a $44.00 price objective on Knowles in a research note on Friday, July 24th. Weiss Ratings upgraded Knowles from a "hold (c+)" rating to a "buy (b-)" rating in a research report on Thursday, October 8th. Susquehanna reduced their target price on Knowles from $40.00 to $35.00 and set a "neutral" rating on the stock in a report on Wednesday. Zacks Research cut Knowles from a "strong-buy" rating to a "hold" rating in a research report on Tuesday, September 22nd. Finally, Wall Street Zen cut Knowles from a "strong-buy" rating to a "buy" rating in a research report on Saturday, August 1st. Three research analysts have rated the stock with a Buy rating and two have issued a Hold rating to the company's stock. According to data from MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus price target of $39.00.

About Knowles

Knowles Corporation NYSE: KN is a global manufacturer of advanced electronic components and solutions for audio, communications, medical, industrial and other specialized applications. The company develops products that support sound capture, audio processing, signal management and high-performance connectivity in a range of electronic devices and systems.

Its portfolio includes microelectromechanical systems (MEMS) microphones, audio processors, speakers, receivers, balanced armature drivers and other acoustic components.

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