Kennametal Whiffs on Earnings

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Kennametal (NYS: KMT) reported earnings on Jan. 24. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q2), Kennametal met expectations on revenues and whiffed on earnings per share.

Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share dropped significantly.


Margins contracted across the board.

Revenue details
Kennametal tallied revenue of $633.1 million. The 13 analysts polled by S&P Capital IQ expected to see a top line of $641.5 million on the same basis. GAAP reported sales were 1.3% lower than the prior-year quarter's $641.7 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.50. The 15 earnings estimates compiled by S&P Capital IQ predicted $0.64 per share. GAAP EPS of $0.52 for Q2 were 43% lower than the prior-year quarter's $0.91 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 31.5%, 460 basis points worse than the prior-year quarter. Operating margin was 10.5%, 420 basis points worse than the prior-year quarter. Net margin was 6.7%, 480 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $734.0 million. On the bottom line, the average EPS estimate is $0.98.

Next year's average estimate for revenue is $2.79 billion. The average EPS estimate is $3.34.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 302 members out of 314 rating the stock outperform, and 12 members rating it underperform. Among 117 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 114 give Kennametal a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Kennametal is outperform, with an average price target of $41.77.

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The article Kennametal Whiffs on Earnings originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. TMFDisclosureHere

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