Business

Can KEMET Corporation (NYSE:KEM) Extend the Rebound on Strong Q2 Data?

KEMET Corporation (NYSE:KEM) just reported preliminary results for its second fiscal quarter ended September 30, 2018. Net sales of $349.2 million for the quarter ended September 30, 2018 increased $21.6 million, or 6.6%, from net sales of $327.6 million for the prior quarter ended June 30, 2018.

Net sales increased $47.7 million, or 15.8% from net sales of $301.6 million for the quarter ended September 30, 2017.

KEMET Corporation (NYSE:KEM) trumpets itself as a company that manufactures and sells passive electronic components under the KEMET brand worldwide.

The company operates in three segments: Solid Capacitors, Film and Electrolytic; and Electro-Magnetic, Sensors, and Actuators. It offers tantalum, aluminum polymer, and ceramic capacitors; film, paper, and wet aluminum electrolytic capacitors; electromagnetic interference filters; and electro-magnetic compatible materials and devices, piezo materials and actuators, and various types of sensors.

The company serves original equipment manufacturers, electronics manufacturing services providers, and distributors in various industries, including automotive, communications, computer-related, industrial, consumer, military/aerospace, and alternative energy.

It sells its products through direct sales force and independent sales representatives. The company was founded in 1919 and is headquartered in Fort Lauderdale, Florida.

According to company materials, “The Company’s common stock is listed on the NYSE under the ticker symbol “KEM” (KEM).  At the Investor Relations section of our web site at http://www.kemet.com/IR, users may subscribe to KEMET news releases and find additional information about our Company.  KEMET offers our customers the broadest selection of capacitor technologies in the industry, along with an expanding range of electromechanical devices, electromagnetic compatibility solutions and supercapacitors.  Our vision is to be the preferred supplier of electronic component solutions demanding the highest standards of quality, delivery and service.”

 

Lift Off

As we discussed earlier, KEM just announced reported preliminary results for its second fiscal quarter ended September 30, 2018. Net sales of $349.2 million for the quarter ended September 30, 2018 increased $21.6 million, or 6.6%, from net sales of $327.6 million for the prior quarter ended June 30, 2018. Net sales increased $47.7 million, or 15.8% from net sales of $301.6 million for the quarter ended September 30, 2017.

This announcement has popped the stock higher, which certainly isn’t surprising. KEM shareholders are now sitting on about 34% in gains over the past week.

“Margin expansion continued in all three of our business segments compared to the prior quarter, with the Solid Capacitor Group leading the way. Expectations are that we will see additional margin expansion in our next quarter ending this December and continue with another consecutive quarter over quarter revenue growth. Customer agreements on ceramics products have also been signed that establish ten-year commitments related to capacity expansion that will enable the Company to continue to grow and have committed utilization well into the future,” stated Per Loof, the Company’s Chief Executive Officer. “We continue to be bullish on calendar year 2019 with continued demand in the MLCC space driving volume for both MLCC’s and our Tantalum Polymer business. Given our financial strength, we are pleased to reward our shareholders with an additional return on their investment by announcing a dividend program today,” continued Loof.

Shares of the stock have powered higher over the past month, rallying roughly 20% in that time on strong overall action.

KEMET Corporation (NYSE:KEM) managed to rope in revenues totaling $327.6M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 19.6%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($244.6M against $267.2M, respectively).

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