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Kimball International, Inc. Reported A Surprise Loss, And Analysts Have Updated Their Forecasts

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Simply Wall St
·3 min read
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Kimball International, Inc. (NASDAQ:KBAL) came out with its second-quarter results last week, and we wanted to see how the business is performing and what industry forecasts think of the company following this report. Revenues fell 3.3% short of expectations, at US$136m. Earnings correspondingly dipped, with Kimball International reporting a statutory loss of US$0.02 per share, whereas the analyst had previously modelled a profit in this period. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Kimball International after the latest results.

Check out our latest analysis for Kimball International

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earnings-and-revenue-growth

After the latest results, the consensus from Kimball International's sole analyst is for revenues of US$592.7m in 2021, which would reflect a discernible 4.2% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to tumble 45% to US$0.52 in the same period. Before this earnings report, the analyst had been forecasting revenues of US$592.7m and earnings per share (EPS) of US$0.52 in 2021. The consensus analyst doesn't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The consensus price target fell 6.7% to US$14.00, suggesting that the analyst might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the quarterly results.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kimball International's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast revenue decline of 4.2%, a significant reduction from annual growth of 2.8% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 6.6% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Kimball International is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analyst reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analyst also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Kimball International's revenues are expected to perform worse than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Kimball International's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Kimball International. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Kimball International .

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.