NYSE$KMT

Kennametal Inc · Q2 2023 earnings

Q2 2023 earnings · · Investor relations

Briefing

Kennametal's second quarter of fiscal year 2023 experienced sales growth driven by pricing actions and end market resilience, particularly in the Americas and EMEA, but was tempered by US dollar strength and inflation.

Kennametal's Q2 2023 results showed a 2% increase in sales to $497 million, driven by 11% organic growth, though offset by unfavorable currency exchange. Earnings per diluted share (EPS) was $0.27. The company returned approximately $27 million to shareholders through share repurchases and dividends.

  • Sales increased 2% year-over-year to $497 million, with 11% organic growth.
  • Growth was driven by pricing actions and end market resilience, especially in the Americas and EMEA.
  • EPS was reported at $0.27.
  • Approximately $27 million was returned to shareholders through share repurchases and dividends.

Headline financials

Total Revenue

$497M

Previous: $487M+2.1%
EPS (adj)

$0.27

Previous: $0.35-22.9%
Capital Expenditures

-$50.6M

Previous: -$37.7M-34.1%
Free Cash Flow

-$28.7M

Previous: -$6.32M-354.8%
Net Income

$21.9M

Previous: $31.4M-30.3%
Operating Income

$35.5M

Previous: $47.5M-25.3%
Gross Profit

$143M

Previous: $153M-6.6%
Cash & Equivalents

$76.8M

Previous: $102M-24.6%
Total Assets

$2.58B

Previous: $2.61B-1.2%
Stock-Based Comp

$5.63M

Previous: $6.17M-8.8%

Revenue & EPS history

Kennametal · Revenue · Quarterly

$497M

Q2 2023+2.1%vs Q2 2022
Beat estimate in 6 of 15 quarters(40%)
ActualEstimate

Forward guidance

The Company’s expectations for the third quarter of fiscal 2023 and the full year, which remain largely unchanged, are as follows:

Tailwinds

  • Sales expected to be $520 - $540 million; includes approximately 7 percent of price realization
  • Adjusted operating income expected to be at least $40 million
  • Pricing is expected to substantially cover raw material costs of $23 million, higher wages and general inflation compared to the prior year quarter
  • Under-absorption and price/raw effects expected to improve sequentially
  • Free operating cash flow at approximately 100 percent of adjusted net income

Headwinds

  • Includes a headwind of approximately $20 million from USD strength compared to the third quarter of fiscal 2022
  • USD strength is expected to be a headwind of approximately $4 million compared to the prior year quarter
  • Adjusted EPS is expected to be $1.30 - $1.70
  • Sales expected to be $2.05 - $2.1 billion, including a currency headwind of approximately $100 million
  • Capital spending expected to be $100 - $120 million

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q2 2023

Historical avgQ2 2023

+0.9%

Avg return

Earnings day

+0.9%

Avg return

5 days after

+0.8%

Avg return

30 days after

58%

39 / 67 earnings

Positive

+18.4%

Q3 2026

Best reaction

-10.8%

Q1 2012

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q3 2026+18.4%-1.2%-13.1%
Q2 2026+7.2%+13.8%+4.0%
Q1 2026+13.9%+22.4%+26.0%
Q3 2025+0.1%+10.6%+10.6%
Q2 2025-3.4%-5.6%-4.4%
Q1 2025+10.4%+13.2%+2.6%
Q4 2024+3.8%+1.4%+1.3%
Q3 2024+6.0%+5.0%-0.1%
Q2 2024-5.2%-0.8%+1.8%
Q1 2024+1.0%-0.4%+4.5%
Q4 2023-5.6%-9.8%-13.2%
Q3 2023+5.3%+3.7%-4.0%
Q2 2023-3.8%-6.0%-2.9%
Q1 2023-5.5%-7.8%+0.3%
Q4 2022-1.4%-2.3%-12.7%
Q3 2022+3.2%+1.3%+7.5%
Q2 2022-2.2%-3.3%-11.3%
Q1 2022+0.3%-3.0%-12.2%
Q4 2021+4.7%+0.7%+2.7%
Q3 2021+2.8%+4.1%-6.0%
Q2 2021-5.4%-5.6%+1.9%
Q1 2021-6.3%-3.7%+14.8%
Q4 2020-3.5%+8.6%+14.5%
Q3 2020+3.0%+4.5%+23.7%
Q2 2020-5.4%-5.1%-9.7%
Q1 2020+2.5%+3.9%+6.7%
Q4 2019-6.5%-10.4%-13.4%
Q3 2019-5.7%-12.4%-19.6%
Q2 2019-0.4%-3.9%-4.5%
Q1 2019+1.0%+2.2%+2.3%
Q4 2018+8.0%+2.2%+8.4%
Q3 2018+0.1%+5.9%+1.3%
Q2 2018-4.3%-7.7%-15.9%
Q1 2018+8.6%+5.1%+6.7%
Q4 2017-5.4%-2.0%-5.2%
Q3 2017+7.8%+5.7%-1.7%
Q2 2017+2.7%+5.8%+6.4%
Q1 2017-4.5%-3.9%+22.9%
Q4 2016+4.8%+10.5%+11.1%
Q3 2016+1.7%
Q2 2016+11.2%
Q1 2016-3.8%
Q4 2015-3.0%
Q3 2015+7.8%
Q2 2015+1.4%
Q1 2015-7.4%
Q4 2014-4.8%
Q3 2014+2.9%
Q2 2014-9.1%
Q1 2014+1.3%
Q4 2013+2.7%
Q3 2013+2.9%
Q2 2013-3.5%
Q1 2013-6.6%
Q4 2012+12.6%
Q3 2012-7.8%
Q2 2012-0.8%
Q1 2012-10.8%
Q4 2009+9.8%
Q4 2011+9.8%
Q3 2011+4.1%
Q3 2010+4.1%
Q2 2011-0.8%
Q2 2010+1.1%
Q1 2011+1.1%
Q1 2010+1.1%
Q4 2010+1.1%

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