Key Tronic Corporation Announces Preliminary Q3 EPS $(0.18)-$(0.23); Revenue ~$140M; Says Lower Than Expected Earnings Are Primarily A Result Of Severance Costs Of ~$3.7M, Or $0.27 Per Diluted Share, As The Company Reduced Its Workforce By Over 450 Employees In Mexico
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Key Tronic Corporation (NASDAQ:KTCC) announced preliminary Q3 EPS of $(0.18)-$(0.23) with revenue around $140M, below expectations due to severance costs of ~$3.7M from reducing its workforce by over 450 employees in Mexico. The company cited softening demand and expects annual savings of over $10M from the layoffs. Additionally, production was impacted by severe weather in Mississippi and Arkansas, and expenses increased due to the strengthening of the Mexican Peso.
April 25, 2024 | 8:43 pm
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Key Tronic announced lower than expected Q3 earnings due to severance costs from workforce reduction, weather-related production impacts, and currency fluctuations.
The announcement of lower than expected earnings due to severance costs, weather-related disruptions, and currency fluctuations is likely to negatively impact investor sentiment towards KTCC in the short term. The workforce reduction, while expected to save costs in the long term, incurs significant upfront expenses. Additionally, the unanticipated production losses due to weather and increased expenses from the strengthening of the Mexican Peso further contribute to the negative outlook for the short term.
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