The 10-second takeaway
For the quarter ended March 31 (Q3), Kennametal beat expectations on revenues and beat expectations on earnings per share.
Compared with the prior-year quarter, revenue improved and GAAP earnings per share improved significantly.
Gross margins shrank, operating margins dropped, net margins increased.
Kennametal logged revenue of $696.4 million. The 12 analysts polled by S&P Capital IQ looked for revenue of $679.5 million on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $614.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.98. The 13 earnings estimates compiled by S&P Capital IQ averaged $0.93 per share. GAAP EPS of $0.93 for Q3 were 21% higher than the prior-year quarter's $0.77 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 35.4%, 230 basis points worse than the prior-year quarter. Operating margin was 14.8%, 40 basis points worse than the prior-year quarter. Net margin was 10.8%, 30 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $766.6 million. On the bottom line, the average EPS estimate is $1.08.
Next year's average estimate for revenue is $2.75 billion. The average EPS estimate is $3.80.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 295 members out of 308 rating the stock outperform, and 13 members rating it underperform. Among 102 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 100 give Kennametal a green thumbs-up, and two 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 $50.25.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings. He is the co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Kennametal. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.