KN - Shares of Knowles sink ~16% premarket on mixed Q2 results weak Q3 guidance

Knowles ( NYSE: KN ) stock slumped 16.1% to $16 in Wednesday premarket trading, after the microphone and audio devices maker posted mixed Q2 results and provided Q3 guidance well short of consensus estimates.

KN reported Q2 non-GAAP EPS of $0.33 which beat expectations by $0.01 . Its Q2 revenue of $188M, however, missed by $11.76M , while also falling 5.9% Y/Y.

"Our revenues were pressured by weaker than expected global consumer electronics demand, lockdowns in China and excess channel inventory," said Knowles ( KN ) CEO Jeffrey Niew on the earnings conference call .

KN also guided Q3 non-GAAP revenue of $170M to $185M which was significantly lower than the consensus revenue estimate of $230.02M. KN said it expects Q3 non-GAAP EPS of $0.17 to $0.21 vs. consensus EPS estimate of $0.47.

The Q3 revenue guidance is down about 24% from the same period a year ago and is "driven by lower shipments of MEMS microphones in connection with weak consumer electronic demand and excess compute and smartphone channel inventory," said Knowles ( KN ) CFO John Anderson on the conference call.

The company additionally announced a restructuring program within its Audio segment with an aim to right size manufacturing capacity and operating expenses in its MEMS Microphones product line.

The restructuring program is expected to be completed in Q4 and is estimated to result in annualized savings of $25M to $30M. Restructuring charges are anticipated to be $35M to $45M.

Up to Tuesday's close, KN stock -18.3% YTD.

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