Kennametal Earnings Preview

Before you go, we thought you'd like these...
Before you go close icon

Watch Kennametal's (NYS: KMT) earnings report to see if it can beat analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings Thursday. Kennametal is a global supplier of tooling, engineered components, and advanced materials used in production processes.

What analysts say:

  • Buy, sell, or hold?: Analysts strongly back Kennametal, with seven of 12 rating it a buy and the remainder rating it a hold. Analysts like Kennametal better than competitor Lincoln Electric Holdings overall. Wall Street has warmed to the stock over the past three months, with analysts increasing their endorsement from hold to moderate buy.
  • Revenue forecasts: On average, analysts predict $672.6 million in revenue this quarter. That would represent a rise of 24.9% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.97 per share. Estimates range from $0.92 to $1.03.

What our community says:
CAPS All-Stars are solidly behind the stock with 97% awarding it an "outperform" rating. The community at large concurs with the All-Stars with 93.6% assigning it a rating of "outperform." Fools have embraced Kennametal, though the message boards have been quiet lately with only 78 posts in the past 30 days. Despite the majority sentiment in favor of Kennametal, the stock has a middling CAPS rating of three out of five stars.

Management:
Kennametal's profit has risen year over year by an average of more than twofold. The company raised its gross margin by 2.9 percentage points in the last quarter. Revenue rose 24.7% while cost of sales rose 19.2% to $384.8 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q3

Q2

Q1

Q4

Gross Margin

37.4%

35.4%

35.7%

37%

Operating Margin

14.3%

10.9%

10.9%

11.3%

Net Margin

10.5%

7.7%

6.6%

7.5%

For all our Kennametal-specific analysis, including earnings and beyond, add Kennametal to My Watchlist.

Motley Fool newsletter services have recommended buying shares of Kennametal.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

At the time this article was published

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners