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Sep 30, 2022
Kennametal Q1 2023 Earnings Report
Kennametal's first quarter of fiscal year 2023 resulted in sales increase driven by organic growth, offset by currency headwinds.
Key Takeaways
Kennametal's first quarter fiscal 2023 sales increased by 2% year-over-year to $495 million, driven by 9% organic sales growth, which was partially offset by a 7% negative impact from foreign currency exchange. EPS was $0.34, compared to $0.43 in the prior year quarter. The company returned approximately $36 million to shareholders through share repurchases and dividends.
Sales increased 2 percent year-over-year with $495 million.
Organic sales grew by 9 percent, offsetting a 7 percent negative impact from foreign currency.
Pricing actions covered inflationary pressures.
EPS was reported at $0.34.
Revenue by Geographic Location
Forward Guidance
The Company’s expectations for the second quarter of fiscal 2023 include sales expected to be $480 - $500 million. Annual outlook includes sales expected to be $2.0 - $2.08 billion and adjusted EPS is expected to be $1.30 - $1.70.
Positive Outlook
- Pricing continues to cover approximately $25 million of raw material costs and wage and general cost increases.
- Pricing actions expected to offset raw material costs, wages and general inflation.
- Free operating cash flow at approximately 100 percent of adjusted net income.
- Primary working capital as a percent of sales maintained at 31 - 33 percent throughout the year.
- $200 million three-year share repurchase program to continue
Challenges Ahead
- Sales expected to be $480 - $500 million; includes a headwind of approximately $40 million from USD strength compared to the second quarter of fiscal 2022 and approximately 7 percent of price realization
- Sequential Q1 to Q2 raw material headwind expected to be approximately $15 million
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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