Demo
KMT NYSE· Kennametal Inc.
FundamentalsNews digest Peer analysis
Login
KMT NYSE· Kennametal Inc.
Earnings report Q4 2023

KMT Reports Flat Revenue in Latest Quarter

Segments of Revenue

  • Metal Cutting segment accounted for 54% of total revenue.
  • Infrastructure segment contributed 34% of total revenue.
  • General engineering was the largest end market, representing 47% of total revenue.
  • Transportation and Aerospace & Defense end markets accounted for 17% and 10% of total revenue, respectively.
  • Energy and Earthworks end markets contributed 13% and 3% of total revenue, respectively.

Strengths

  • Despite a flat overall revenue of $495.3 million, KMT experienced a favorable business days effect of 2% and a favorable currency exchange effect of 1%.
  • The Metal Cutting segment saw higher price realization, contributing to the overall revenue stability.
  • Restructuring savings of approximately $5 million partially offset the decrease in operating income.

Challenges

  • Organic sales declined by 3%, impacting the overall revenue performance.
  • Lower volumes, higher wages, and general inflation, along with unfavorable pricing compared to raw material costs in the Infrastructure segment, led to a decrease in operating income.
  • Operating margin decreased from 7.1% in the prior year quarter to 5.7% in the latest quarter.

Noteworthy

  • Kennametal made changes to its end market classification, which impacted the revenue breakdown. Defense sales were combined with aerospace sales, certain Metal Cutting sales were reclassified, and Infrastructure's ceramics sales were reclassified.
  • The company retrospectively restated the fiscal 2023 period to align with the new end markets.

Summary

KMT reported flat revenue of $495.3 million in the latest quarter. While the overall revenue remained stable, the company faced challenges such as a decline in organic sales and lower volumes in the Infrastructure segment. However, KMT benefited from higher price realization in the Metal Cutting segment and restructuring savings. The changes in end market classification also impacted the revenue breakdown. Going forward, KMT will need to address the challenges in order to drive revenue growth and improve operating margin.

Source documents

Form 10-Q  filed on Feb 07, 2024
116 pages scanned

Reference data

Company financials Q4 revenue 516M
Analyst estimates Q4 EPS beat by 17.94%
Sign up to Fey

Get in-depth analysis on thousands of stocks for just $30/month. Cancel anytime.