Kennametal Inc. ( KMT ) reported its
financial results for the fiscal third quarter of 2013 (ended Mar
31, 2013) on Apr 25, 2013. Adjusted earnings per share came in at
65 cents, way below earnings of 98 cents reported in the year-ago
quarter and the Zacks Consensus Estimate of 71 cents.ACTUANT CORP (ATU): Free Stock Analysis ReportHARDINGE INC (HDNG): Free Stock Analysis ReportKENNAMETAL INC (KMT): Free Stock Analysis
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Including adjustments from Stellite, GAAP earnings per share in
the quarter were 67 cents versus 93 cents in the year-ago
Kennametal reported a 5.9% year-over-year decline in its revenue
that settled at $655.4 million. The decline in revenue was due
primarily to a fall of 6% in organic revenue, a 5% impact from
fewer working days in the quarter and 1% negative impact from
foreign currency translation. These were, however, offset to the
tune of 6% due to two months' revenue contribution from
Adjusted revenue in the quarter came in at $594.2 million, down
compared with $673.9 million in the year-ago quarter.
A brief discussion on the segments of Kennametal is given
Industrial segment generated $373.8 million in revenue, down 11%
from the year-ago quarter as weakness in general engineering and
transportation impacted results adversely. Moreover, revenues
across the Americas, Asia and Europe declined.
Infrastructure segment reported 1% year-over-year increase in
revenue that came in at $281.6 million. The rise can be attributed
to revenue contributions from Stellite, offset by an organic
revenue decline and lesser working days in the quarter. On an
adjusted basis, Infrastructure revenue in the quarter was $220.3
million, down compared with $255.3 million in the year-ago
On a geographical basis, revenue in North America plummeted 11.4%
year over year to $289.5 million; revenue from Western Europe was
$199.2 million, up 3.2% year over year while revenue from Rest of
the World was about $166.6 million, down 5.6% year over year.
Cost of revenue in the quarter went down 0.7% year over year and
represented 68.2% of total revenue; up from 64.6% in the year-ago
quarter. Operating expenses, as a percentage of total revenue,
stood at 19.6%. Adjusted operating margin in the quarter was 12.1%,
down 390 basis points year over year.
Exiting the fiscal third quarter 2013, cash and cash equivalents
of Kennametal stood at $322.1 million compared with $216.8 million
in the previous quarter. Long-term debt and capital leases were
roughly $703.9 million versus $704.2 million in the previous
Net cash flow from operating activities in the quarter was $96.1
million, up from $93.1 million in the year-ago quarter while
capital expenditure was at $19.4 million versus $25.1 million in
the year-ago quarter. Free cash flow was approximately $77.7
million compared with $69.9 million in the year-ago quarter.
Apart from declaring its financial results, Kennametal also
announced that it has received approval from its Board of Directors
for the payment of a 16 cent per share quarterly dividend. The
payment will be made on May 22, 2013 to shareholders of record as
on May 7, 2013.
For 2013, management of Kennametal now anticipates that sales
would decline to the range of 5%-6% as against a drop ranging from
2%-4% expected earlier. Organic revenue is predicted to decline
within the 8%-9% range versus 7%-9% anticipated earlier. The
lowered guidance reflects prevailing weakness in the company's
industrial end markets as well as in road construction, underground
mining, and oil and gas markets in the U.S.
Earnings per share are now expected to fall within the $2.45-$2.55
range, below the $2.60-$2.80 range projected earlier.
Kennametal also revised its cash flow guidance for fiscal 2013.
Cash flow generated from operating activities is likely to be
within $260-280 million (versus $290-$325 million expected
earlier), capital expenditure to be within the $90-$100 million
range and free cash flow to be within the $170-$180 million range
(versus $200-$225 million expected earlier).
Kennametal currently carries a Zacks Rank #3 (Hold). Other stocks
to watch out for in the industry are MRC Global
Inc. ( MRC
)- expected to report on May 2, 2013; Actuant
Corporation ( ATU )-expected to
report on Jun 19, 2013; and Hardinge Inc. ( HDNG )-expected to
release its results on May 6, 2013.