Key Tronic (KTCC) Prelim. EPS Misses Views; Notes Recently Cancelled Orders

Key Tronic (NASDAQ: KTCC) announced its preliminary results for the three months ended September 26, 2015.

For the first quarter of fiscal 2016, Key Tronic expects to report revenue of approximately $126 million, which is in line with previous guidance. The Company had approximately $2.0 million of unanticipated expenses and impact on gross margin related to a single longstanding customer that requested a significant and immediate increase in production volumes for a new program at the start of the quarter and then later abruptly cancelled those orders. As a result, the Company expects earnings for the first quarter of fiscal 2016 in the range of $0.06 to $0.08 per share, which is below previous guidance.

*** The Street sees Q1 revenue of $125.3 million and EPS of $0.19.

“While the sudden and unanticipated earnings impact from the unusual volatility in demand of a certain customer in the past quarter was disappointing, we expect to see an increase in earnings in the second quarter, as new programs continue to ramp and we continue to diversify our customer base,” said Craig Gates, President and Chief Executive Officer.

The Company plans to announce its complete results for the first quarter of fiscal 2016, and more specific guidance for the second quarter of fiscal 2016, on October 27, 2015.

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