Foodservice packaging supplier Karat Packaging (NASDAQ:KRT) will be reporting earnings tomorrow after market close. Here’s what investors should know.
Karat Packaging missed analysts’ revenue expectations by 1.1% last quarter, reporting revenues of $112.6 million, up 3.5% year on year. It was a disappointing quarter for the company, with a miss of analysts’ operating margin estimates.
Is Karat Packaging a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Karat Packaging’s revenue to grow 7% year on year to $112.9 million, a reversal from the 4.1% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.49 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Karat Packaging has missed Wall Street’s revenue estimates six times over the last two years.
Looking at Karat Packaging’s peers in the specialty equipment distributors segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Richardson Electronics delivered year-on-year revenue growth of 2.2%, beating analysts’ expectations by 8.7%, and Herc reported revenues up 6.3%, topping estimates by 3.6%. Richardson Electronics traded down 2.5% following the results while Herc was up 23.9%.
Read our full analysis of Richardson Electronics’s results here and Herc’s results here.
There has been positive sentiment among investors in the specialty equipment distributors segment, with share prices up 2.7% on average over the last month. Karat Packaging is up 6.1% during the same time and is heading into earnings with an average analyst price target of $31.67 (compared to the current share price of $27.18).
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