Knife River (NYSE:KNF) Announces Quarterly Earnings Results

Knife River (NYSE:KNF) issued its quarterly earnings results on Tuesday. The company reported $2.43 earnings per share for the quarter, missing the consensus estimate of $2.58 by ($0.15), Zacks reports. Knife River had a net margin of 3.98% and a return on equity of 8.22%. The business had revenue of $1.28 billion during the quarter, compared to analyst estimates of $1.30 billion. During the same quarter last year, the firm posted $2.52 earnings per share. The company’s revenue was up 6.0% on a year-over-year basis.

Here are the key takeaways from Knife River’s conference call:

• Third-quarter performance was resilient, with revenue up 6% to $1.3 billion, adjusted EBITDA of $272 million and a margin above 21%. Aggregates led results, with volumes up 10%, mid-single-digit pricing growth and gross margin expanding 240 basis points to nearly 30%.
• The company introduced its Sharper EDGE program, targeting operational, commercial and organizational improvements over the next three years. Knife River plans to invest more than $125 million in aggregate operations and expects the initiatives to add approximately $1 per ton to aggregate gross profit, alongside further SG&A and productivity benefits.
• Contracting services continued to face fewer bid lettings, project delays, higher fuel and input costs, and increased competition; second-half contracting margins are expected at 8%-9%. Backlog fell 14% year over year to $857 million, while full-year ready-mix volume expectations were reduced to high-single-digit to low-double-digit growth.
• Knife River now expects full-year revenue of $3.375 billion-$3.425 billion and adjusted EBITDA of $475 million-$505 million, assuming normal weather and economic conditions and excluding acquisitions. Net leverage was 2.9 times at quarter-end, with the company expecting to finish the year modestly above its 2.5-times target while retaining capacity for acquisitions and organic investments.

Knife River Trading Down 8.2%

Knife River stock traded down $5.08 during midday trading on Thursday, reaching $57.16. The stock had a trading volume of 398,838 shares, compared to its average volume of 699,205. Knife River has a twelve month low of $47.79 and a twelve month high of $96.28. The stock has a market capitalization of $3.24 billion, a PE ratio of 24.22, a price-to-earnings-growth ratio of 1.36 and a beta of 0.40. The company has a debt-to-equity ratio of 0.88, a quick ratio of 1.60 and a current ratio of 2.73. The stock’s 50-day simple moving average is $55.40 and its 200 day simple moving average is $73.78.

Analysts Set New Price Targets

A number of equities research analysts have recently commented on the company. Citigroup downgraded Knife River to a “cautious” rating in a research report on Wednesday, September 9th. B. Riley Financial reduced their target price on Knife River from $105.00 to $65.00 and set a “buy” rating on the stock in a research report on Friday, September 25th. Weiss Ratings lowered Knife River from a “hold (c)” rating to a “hold (c-)” rating in a research note on Monday. Stephens raised their price target on Knife River from $65.00 to $70.00 and gave the stock an “overweight” rating in a research note on Thursday. Finally, Royal Bank Of Canada cut Knife River from an “outperform” rating to a “sector perform” rating and lowered their price target for the company from $103.00 to $58.00 in a report on Friday, October 9th. One analyst has rated the stock with a Strong Buy rating, four have given a Buy rating, four have issued a Hold rating and two have given a Sell rating to the company’s stock. According to MarketBeat.com, the stock currently has an average rating of “Hold” and an average price target of $67.86.

About Knife River

Knife River Corporation is a construction materials and contracting company headquartered in Bismarck, North Dakota. The company produces and sells construction aggregates, asphalt, ready-mix concrete and cement, and also provides related construction services for transportation, commercial, residential and industrial projects.

Its operations include aggregate mining and processing, asphalt and concrete production, paving, site development and other heavy-construction activities. Knife River serves public-sector and private-sector customers, including state and local governments, contractors, commercial developers and industrial businesses.

Knife River became an independent publicly traded company in 2023 after being spun off from MDU Resources Group.