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Kennametal Inc. KMT reported third-quarter fiscal 2025 (ended March 31, 2025) adjusted earnings of 47 cents per share, which beat the Zacks Consensus Estimate of 26 cents. The bottom line increased 56.7% from the year-ago figure. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
KMT’s Revenue Details
Kennametal’s revenues were $486.4 million, which decreased 5.7% from the year-ago quarter’s figure. Organic sales declined 3% year over year. Business days did not have any impact in the quarter.
KMT’s revenues missed the Zacks Consensus Estimate of $490 million.
On a geographical basis, revenues from American operations decreased 3% year over year to $240.4 million, whereas sales from the Europe, the Middle East and Africa region were $151.3 million, down 4% from the year-ago quarter. Sales from the Asia Pacific belt decreased 1% to $94.8 million.
Kennametal reports results under two business segments, namely Metal Cutting and Infrastructure. Its segmental performance for the fiscal third quarter is briefly discussed below:
The Metal Cutting segment’s revenues of $304.3 million decreased 7% year over year. Organic revenues declined 4%. Foreign currency had a negative impact of 3%. The Zacks Consensus Estimate for Metal Cutting’s revenues was pegged at $307 million.
The Infrastructure segment’s revenues totaled $182.1 million, down 4% year over year. Organic revenues decreased 2% and currency exchange had a negative impact of 2% year over year. The consensus estimate for Infrastructure’s revenues was pegged at $184 million.
Kennametal Inc. Price, Consensus and EPS Surprise
Kennametal Inc. price-consensus-eps-surprise-chart | Kennametal Inc. Quote
KMT’s Margin Profile
Kennametal’s cost of goods sold decreased 9% year over year to $330 million. The gross profit increased 2% year over year to $156.4 million, while the margin increased 250 basis points (bps) to 32.2%. Operating expenses were $109.3 million, up 1.8% year over year.
Operating income increased 25.7% year over year to $44.1 million. Operating margin increased 230 bps year over year to 9.1%. Lower raw material costs aided the results.
Interest expenses were $6.2 million, down 8.3% from the year-ago quarter’s figure. The adjusted effective tax rate was 22.8%.
Kennametal’s Balance Sheet and Cash Flow
While exiting the fiscal third quarter, Kennametal’s cash and cash equivalents were $97.5 million compared with $128 million in fourth-quarter fiscal 2024. Long-term debt was $596.6 million compared with the $596 million in the year-ago quarter.
In the first nine months of fiscal 2025, Kennametal generated net cash of $129.7 million in operating activities compared with $163.5 million in the previous fiscal year’s quarter. Capital invested in purchasing property, plant and equipment (net of the amount received on disposals) was $67.5 million, down 19.9% from $84.2 million in the prior fiscal year. Free operating cash flow was $63 million compared with $84 million in the previous fiscal year’s period.
KMT paid a dividend of $46.6 million and repurchased shares worth $55.1 million.