Shares of KEMET Corp. (NYSE:KEM) jumped on Tuesday after the supplier of passive electronic components reported its second-quarter results. The company beat analyst estimates for both revenue and earnings. The stock was up about 12.3% at 1:45 p.m. EDT.
KEMET reported second-quarter revenue of $349.2 million, up 15.8% year over year and about $13.7 million above the average analyst estimate. Non-GAAP earnings per share came in at $0.87, up from $0.45 in the prior-year period and $0.27 higher than analysts were expecting.
Gross margin soared 430 basis points year over year to 32.5% on a GAAP basis. In the earnings release, CEO Per Loof said, "Margin expansion continued in all three of our business segments compared to the prior quarter, with the Solid Capacitor Group leading the way."
Along with reporting strong results, KEMET announced the initiation of a quarterly dividend. The first $0.05 per-share payment is payable on Nov. 26 to shareholders of record on Nov. 16.
KEMET expects the margin expansion it saw during the second quarter to continue into the third quarter. Loof is also optimistic about 2019: "We continue to be bullish on calendar year 2019 with continued demand in the [multilayer ceramic capacitor] space driving volume for both MLCCs and our Tantalum Polymer business."
Shares of KEMET are still down over the past year after Tuesday's rally, but they surged in 2017 and are up more than 600% over the past three years.