What happened

Shares of KEMET Corporation (NYSE:KEM) got destroyed today, down by 30% as of noon EDT, after the company reported preliminary fiscal second-quarter results. While the results met analyst expectations, shares had gained 274% year to date prior to the release, so investors might have been pricing in even loftier expectations.

So what

Revenue in the fiscal second quarter totaled $301.5 million; that included sales from KEMET's acquisition of NEC TOKIN, which closed in April. Non-GAAP (generally accepted accounting principles) net income was $26.5 million, or $0.45 per share. The Street was modeling for $298.5 million in sales and an adjusted profit of $0.45 per share.

A blue circuit board

Image source: Getty Images.

KEMET's GAAP net income included acquisition gains of $135.6 million and equity-method investment income of $75.4 million, since KEMET had a 34% interest in TOKIN's gain from selling its electromechanical devices business.

Now what

"As we predicted, reflecting on the prior quarter the TOKIN acquisition was accretive from the very start of the acquisition. This quarter continued the trend with strong performance as revenue, gross margins and net income improved sequentially over and above the impact of the acquisition," CEO Per Loof said in a statement. "We have only just begun the journey and the synergy teams are working diligently to extract the benefits of the combination. We continue to remain excited about the prospects of increasing value for our shareholders through the TOKIN acquisition, new technologies, and expanded customer base that we have created."

KEMET will observe a quiet period starting on January 1, 2018, until the company reports its next quarterly earnings release.