The 10-second takeaway
For the quarter ended March 31 (Q3), Kennametal missed estimates on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share contracted significantly. GAAP earnings per share dropped significantly.
Margins dropped across the board.
Kennametal reported revenue of $655.4 million. The 13 analysts polled by S&P Capital IQ expected revenue of $676.7 million on the same basis. GAAP reported sales were 5.9% lower than the prior-year quarter's $696.4 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 $0.65. The 16 earnings estimates compiled by S&P Capital IQ anticipated $0.71 per share. Non-GAAP EPS of $0.65 for Q3 were 34% lower than the prior-year quarter's $0.98 per share. GAAP EPS of $0.67 for Q3 were 28% lower than the prior-year quarter's $0.93 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 31.8%, 360 basis points worse than the prior-year quarter. Operating margin was 11.4%, 430 basis points worse than the prior-year quarter. Net margin was 8.2%, 260 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $688.1 million. On the bottom line, the average EPS estimate is $0.84.
Next year's average estimate for revenue is $2.60 billion. The average EPS estimate is $2.62.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 293 members out of 305 rating the stock outperform, and 12 members rating it underperform. Among 100 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 99 give Kennametal a green thumbs-up, and one 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 $45.67.
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