The 10-second takeaway
For the quarter ended June 30 (Q4), Kennametal met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share shrank significantly. GAAP earnings per share contracted significantly.
Margins shrank across the board.
Kennametal booked revenue of $671.4 million. The 12 analysts polled by S&P Capital IQ expected a top line of $678.9 million on the same basis. GAAP reported sales were 9.2% lower than the prior-year quarter's $739.2 million.
EPS came in at $0.78. The 14 earnings estimates compiled by S&P Capital IQ anticipated $0.74 per share. Non-GAAP EPS of $0.78 for Q4 were 28% lower than the prior-year quarter's $1.08 per share. GAAP EPS of $0.76 for Q4 were 28% lower than the prior-year quarter's $1.05 per share.
For the quarter, gross margin was 34.1%, 170 basis points worse than the prior-year quarter. Operating margin was 13.5%, 280 basis points worse than the prior-year quarter. Net margin was 9.1%, 250 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $650.9 million. On the bottom line, the average EPS estimate is $0.62.
Next year's average estimate for revenue is $2.76 billion. The average EPS estimate is $3.18.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 285 members out of 297 rating the stock outperform, and 12 members rating it underperform. Among 103 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 102 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 $44.17.
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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 here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends 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.