Knife River (NYSE:KNF) Announces Earnings Results, Misses Expectations By $0.36 EPS

Knife River (NYSE:KNF) issued its earnings results on Tuesday. The company reported $0.77 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.13 by ($0.36), Zacks reports. The firm had revenue of $938.57 million during the quarter, compared to analysts’ expectations of $931.39 million. Knife River had a return on equity of 8.73% and a net margin of 4.23%.The firm’s quarterly revenue was up 12.6% compared to the same quarter last year. During the same period in the prior year, the company earned $0.89 EPS.

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

• Positive Sentiment: Revenue guidance was raised to $3.4 billion-$3.6 billion, while adjusted EBITDA guidance was reaffirmed at $520 million-$560 million; management expects about 55% of full-year EBITDA in the third quarter.
• Positive Sentiment: Underlying operations remained strong, with second-quarter revenue up 13%, double-digit volume growth across materials, and like-for-like adjusted EBITDA up 7% excluding asset-sale gains. Aggregate, ready-mix, and asphalt gross profit increased 12%, 21%, and 24%, respectively.
• Neutral Sentiment: Results were pressured by approximately $24 million of fuel costs, weather, project delays, and unfavorable contracting-services work mix. Fuel escalators and project bonuses should provide some recovery in the second half, but much of the delayed Texas, Hawaii, and Alaska work is now expected to shift into 2027.
• Negative Sentiment: Contracting-services margins faced competitive bidding pressure, particularly tied to limited Oregon paving activity, while lower-margin legacy acquisition projects are expected to weigh primarily through the third quarter. Aggregate margin expansion is now expected to be closer to 100 basis points rather than the previously targeted 200 basis points.
• Positive Sentiment: Management highlighted strong long-term demand from infrastructure, data centers, semiconductor facilities, and energy projects, alongside a healthy acquisition pipeline and approximately $140 million invested in organic growth initiatives. Net leverage is expected to return near the company’s 2.5-times long-term target by year-end.

Knife River Trading Up 0.9%

KNF traded up $0.60 on Thursday, hitting $68.39. 82,672 shares of the company were exchanged, compared to its average volume of 609,664. The company has a debt-to-equity ratio of 1.00, a quick ratio of 1.31 and a current ratio of 2.66. The firm has a fifty day simple moving average of $80.17 and a two-hundred day simple moving average of $81.24. The stock has a market capitalization of $3.88 billion, a PE ratio of 27.87, a price-to-earnings-growth ratio of 1.24 and a beta of 0.42. Knife River has a 12 month low of $58.72 and a 12 month high of $96.28.

Analyst Upgrades and Downgrades

Several research firms have commented on KNF. Zacks Research downgraded shares of Knife River from a “strong-buy” rating to a “hold” rating in a research note on Monday. JPMorgan Chase & Co. upped their price objective on shares of Knife River from $90.00 to $95.00 and gave the company a “neutral” rating in a research note on Wednesday, May 6th. Stephens set a $80.00 target price on shares of Knife River in a report on Wednesday. Oppenheimer began coverage on shares of Knife River in a research report on Thursday, May 28th. They issued an “outperform” rating and a $95.00 target price on the stock. Finally, Wells Fargo & Company raised shares of Knife River from an “underweight” rating to an “equal weight” rating and lowered their price target for the stock from $81.00 to $73.00 in a research note on Wednesday. Six research analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company’s stock. According to data from MarketBeat.com, the company currently has an average rating of “Moderate Buy” and a consensus target price of $91.86.

Institutional Trading of Knife River

A number of institutional investors have recently made changes to their positions in the stock. Corient Private Wealth LLC increased its stake in shares of Knife River by 12.7% in the fourth quarter. Corient Private Wealth LLC now owns 5,315 shares of the company’s stock worth $375,000 after buying an additional 601 shares during the period. Alberta Investment Management Corp bought a new stake in Knife River during the 4th quarter valued at $1,590,000. Mercer Global Advisors Inc. ADV purchased a new stake in Knife River during the 4th quarter valued at $358,000. Vident Advisory LLC purchased a new stake in Knife River during the 4th quarter valued at $297,000. Finally, State of Tennessee Department of Treasury grew its holdings in Knife River by 14.4% in the 4th quarter. State of Tennessee Department of Treasury now owns 21,992 shares of the company’s stock worth $1,477,000 after acquiring an additional 2,768 shares during the last quarter. Hedge funds and other institutional investors own 80.11% of the company’s stock.

About Knife River

Knife River Corporation, headquartered in Bismarck, North Dakota, is a leading integrated construction materials and contracting company in the western United States. The company specializes in producing and supplying aggregates, asphalt mix, ready-mixed concrete and other heavy construction materials used in highway, commercial and residential projects.

In addition to material production, Knife River offers a comprehensive suite of contracting services, including heavy civil construction, road building, underground and open-pit mining and logistics support.