Shares of Kimball Electronics (KE -14.09%) are down 14.3% as of 3:45 p.m. ET Tuesday after the electronics manufacturing solutions provider announced disappointing quarterly results.

Inside Kimball Electronics’ “hard-fought” quarter

For its fiscal second quarter of 2024 ended Dec. 31, 2023, Kimball’s net sales declined 4% year over year to $421.2 million, including a 1% tailwind from foreign currency exchange. On the bottom line, that translate to adjusted (non-GAAP) earnings of $8.3 million, or $0.33 per share, down from $0.44 per share in the same year-ago period.

Analysts, on average, were expecting earnings of $0.40 per share on revenue of $435 million.

Kimball CEO Richard Phillips noted that amid persistent global macroeconomic headwinds, the quarter was expectedly “hard fought, with our team navigating a challenging operating environment.” The company also reduced its manufacturing output during the quarter to better correlate to lower demand — though margins have remained stable thanks to cost-reduction initiatives.

What’s next for Kimball Electronics stock?

Kimball management says it expects industrywide pressure to continue for the rest of this fiscal year. The company adjusted its guidance to reflect as much, calling for full fiscal-year sales to decline 2% to 4% year over year (down from previous guidance for sales to be roughly flat). Kimball also reduced its outlook for operating income to be in the range of 4.2% to 4.6% of net sales, down from previous guidance for operating income to be roughly flat from fiscal 2023 at 6.3% of net sales.

In the end, Kimball is doing well to manage the factors of its business within its control. But given its ongoing macro challenges and incrementally worse outlook today, the stock is understandably falling in response.