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Mar 31, 2023
Kennametal Q3 2023 Earnings Report
Kennametal's third quarter performance in fiscal year 2023 reflected year-over-year sales growth and strong cash flow, driven by strategic initiatives amidst macroeconomic headwinds.
Key Takeaways
Kennametal reported a 5% increase in sales to $536 million, driven by 8% organic growth. EPS was $0.39. The company returned $23 million to shareholders through share repurchases and dividends. Strong cash from operations and free operating cash flow increased 36% and 78%, respectively, year-over-year. The company is raising its full year sales and EPS outlook.
Sales increased by 5% year-over-year, with organic growth of 8%.
Earnings per diluted share (EPS) reached $0.39.
Approximately $23 million was returned to shareholders through share repurchases and dividends.
Cash from operations and free operating cash flow showed strong year-over-year growth, increasing by 36% and 78%, respectively.
Revenue by Geographic Location
Forward Guidance
The Company’s expectations for the full fiscal year 2023 are as follows:
Positive Outlook
- Adjusted EPS is expected to be $1.50 - $1.70
- Sales expected to be $2.07 - $2.1 billion, including a currency headwind of approximately $100 million
- Pricing actions expected to cover raw material costs, wages and general inflation
- Metal Cutting volume levers at expected rate
- Free operating cash flow of 100 percent of adjusted net income
Challenges Ahead
- Infrastructure operating margin expected to return in Q4 to approximately Q1 FY23 level
- Primary working capital as a percent of sales maintained at 31 - 33 percent throughout the year
- Capital spending expected to be approximately $100 million
- Adjusted ETR is expected to be approximately 24 percent
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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