Dj Dir Davis Sells 13053 Of Kennametal Inc >Kmt

Kennametal Inc. KMT reported first-quarter fiscal 2025 (ended Sept. 30, 2024) adjusted earnings of 29 cents per share, which beat the Zacks Consensus Estimate of 25 cents. The bottom line decreased 29.3% from the year-ago figure.

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KMT’s Revenue Details

Kennametal’s revenues were $481.9 million, which decreased 2% from the year-ago quarter’s figure. Organic sales declined 2% year over year. Business days had a positive impact of 1%. Currency exchange negatively affected sales by 1%.

KMT’s revenues beat the Zacks Consensus Estimate of $581 million.

On a geographical basis, revenues from American operations decreased 2% year over year to $237.7 million, whereas sales from Europe, the Middle East and Africa region were $145.9 million, down 1% from the year-ago quarter’s reading. Sales from the Asia Pacific belt increased 2% to $98.3 million.

Kennametal reports results under two business segments, namely Metal Cutting and Infrastructure. Its segmental performance for the fiscal first quarter is briefly discussed below:

The Metal Cutting segment’s revenues of $297 million decreased 4% year over year. Organic revenues declined 4%. Forex woes had an unfavorable impact of 2%, while business days had a positive impact of 2%. The Zacks Consensus Estimate for Metal Cutting’s revenues was pegged at $301 million.

The Infrastructure segment’s revenues totaled $185 million, up 0.4% year over year. Organic revenues increased 1%, while business days had a negative impact of 1% year over year. The consensus estimate for Infrastructure’s revenues was pegged at $180 million.

Kennametal Inc. Price, Consensus and EPS Surprise

Kennametal Inc. price-consensus-eps-surprise-chart | Kennametal Inc. Quote

KMT’s Margin Profile

Kennametal’s cost of goods sold increased 0.4% year over year to $330.9 million. The gross profit decreased 7% year over year to $151 million, while the margin decreased 180 basis points (bps) to 31.3%. Operating expenses were $112 million, flat year over year.

The operating income decreased 25% year over year to $37 million. Operating margin decreased 130 bps year over year to 7.6%. Lower sales and production volumes within the Metal Cutting segment, higher wages and general inflation and certain manufacturing costs within the Infrastructure segment ailed the results.

Interest expenses were $6.3 million, down 12% from the year-ago quarter’s figure. The adjusted effective tax rate was 4.4%.

Kennametal’s Balance Sheet and Cash Flow

While exiting the fiscal first quarter, Kennametal’s cash and cash equivalents were $119.6 million compared with $128 million in fourth-quarter fiscal 2024. Long-term debt was $596.2 million compared with the $596 million in the year-ago quarter.

In the first three months of fiscal 2025, Kennametal generated net cash of $45.7 million in operating activities compared with $25.7 million in the previous fiscal year’s quarter. Capital invested in purchasing property, plant and equipment (net of the amount received on disposals) was $24.7 million, down 22.2% from $31.8 million in the prior fiscal year. Free operating cash flow was $21.1 million against $3 million cash out flow in the previous fiscal year’s period.

KMT paid a dividend of $15.6 million and repurchased shares worth $15 million.

KMT’s Dividend Update

Kennametal announced that its board of directors approved a quarterly cash dividend of 20 cents per share to its shareholders of record as of Nov. 12, 2024. The disbursement will be made on Nov. 26.

Kennametal’s Guidance

For fiscal 2025 (ending June 2025), the company anticipates sales to be in the range of $2.0-$2.1 billion. Adjusted earnings per share are anticipated to be in the range of $1.30-$1.70. Free operating cash flow is expected to be more than 125% of net income (adjusted).

Capital spending is expected to be approximately $110 million.

KMT’s Zacks Rank

The company currently carries a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Industrial Companies

Avery Dennison Corporation AVY delivered third-quarter adjusted earnings of $2.33 per share, which beat the Zacks Consensus Estimate of $2.32. The bottom line increased 9% year over year, driven by higher volume and productivity gains.

Total revenues grew 4.1% year over year to $2.18 billion and missed the Zacks Consensus Estimate of $2.2 billion.

John Bean Technologies Corporation JBT reported adjusted earnings of $1.50 per share in third-quarter 2024, 35.1% higher than the prior-year quarter. The figure beat the consensus estimate of $1.41.

Revenues of $454 million increased 12.4% from the year-ago quarter. The top line surpassed the consensus estimate of $445 million.

A. O. Smith Corporation’s AOS third-quarter adjusted earnings of 82 cents per share matched the Zacks Consensus Estimate. The bottom line decreased 8.9% on a year-over-year basis.

Net sales of $902.6 million missed the consensus estimate of $913 million. The top line decreased 4% year over year due to lower sales in China and decreased volumes of water heaters in North America.

Zacks Investment Research

U.S. stocks were higher, with the Dow Jones index gaining around 1,300 points on Wednesday.

Shares of Mercury Systems, Inc. rose sharply during Wednesday's session after the company reported better-than-expected quarterly financial results.

Mercury Systems reported quarterly earnings of 4 cents per share which beat the analyst consensus estimate of a loss of 8 cents per share. The company reported quarterly sales of $204.431 million which beat the analyst consensus estimate of $181.772 million.

Mercury Systems shares jumped 16.7% to $39.90 on Tuesday.

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• CVS Health Corporation surged 10.7% to $61.26 following strong quarterly revenue.

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