Kennametal (KMT) Tops Q2 EPS by 14c, Revenues Beat

Kennametal (NYSE: KMT) reported Q2 EPS of $0.23, $0.14 better than the analyst estimate of $0.09. Revenue for the quarter came in at $440.51 million versus the consensus estimate of $423.61 million.

"We experienced strong sequential sales growth in the quarter that outpaced our expectations, driven by improving demand mainly in the Transportation and General Engineering end-markets. These end-market trends coupled with the progress on our growth initiatives and continued delivery of simplification/modernization benefits led to solid margin improvement and strong free operating cash flow in the quarter," said Christopher Rossi, President and CEO.

Rossi continued: "Our transformation is well underway, and we have permanently improved the cost-structure of the Company, as demonstrated by the higher profitability levels we are achieving now versus previous downturns. Assuming no significant economic shutdowns from COVID-19, we expect Q3 sales to modestly outpace normal seasonal trends and to have positive free operating cash flow for the full year. We remain well positioned to gain market share and deliver better profitability as end-markets continue to improve due to our actions over the last few years."

Outlook and Third Quarter Assumptions

While there continue to be signs of improvement, overall global market conditions remain unpredictable and visibility into the Company's primary end-markets remains limited. Therefore, the Company will not be providing an FY21 outlook at this time, outside of capital spending, which is unchanged and expected to be between $110 million and $130 million. The Company will provide more details regarding its third quarter assumptions on its conference call.

For earnings history and earnings-related data on Kennametal (KMT) click here.

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