Updated Aug 18 at 10:23pm ET.
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KONE earned $0.27 per share last quarter, missing the $0.32 that analysts expected. Revenue of $3.36 billion also came in slightly below the $3.38 billion target. These results reflect a period of transition as the company manages the costs of its massive merger with TK Elevator.
Despite the miss, the company is sticking to its full-year financial goals. The long-term view for KONE depends on successfully combining these two giants to dominate the service market. While the integration is expensive and complex, the core business of maintaining elevators remains a steady source of cash because safety laws make that work mandatory for building owners.
Schindler, a major competitor in the elevator industry, says it sees a chance to win over customers and hire away staff while KONE is busy integrating TK Elevator. Large mergers often create temporary distractions, and Schindler's CEO indicated the firm may also look to buy assets that KONE might be forced to sell to get the deal approved by regulators.
This is a common risk during a giant takeover. If KONE's focus shifts too much toward internal restructuring, it could lose ground in its core service business. For now, this is a competitive threat to watch rather than a reason to change our view, as KONE's scale after the merger will still be its primary advantage.
Source: Reuters
Analysts have largely stopped tracking this stock, with only one expert currently holding a neutral view. There is no official average price target, leaving investors without clear guidance on whether the shares are fairly priced.
Management has struggled to hit analyst targets lately, missing expectations in five of the last six quarters. This suggests the business is currently harder to forecast than usual.
| Expectation | |
|---|---|
| EPS | $0.31 |
| Revenue | $3.36B |
