Kennametal profit falls 43%, outlook for year reduced
Kennametal Inc. posted a 43 percent drop in profit for its second quarter ended Dec. 31 and reduced its guidance for sales and earnings for the rest of its year ending June 30.
Earnings for the Unity-based tooling and advanced materials manufacturer fell to $42 million, or 52 cents a share, from nearly $74 million, or 91 cents a share, a year earlier, the company said on Thursday.
Kennametal shares closed at $41.00, down $1.35 from Wednesday's close.
Sales slipped 1.4 percent to about $633 million in the October-December period from almost $642 million a year before. Sales declined from lower demand globally, especially in Asia, executives told analysts on a conference call.
“Continued soft demand and destocking plugged our general engineering market. Transportation was particularly slow in Europe due to the extended plant shutdowns in December at automotive manufacturers. And customers further delayed their projects in energy markets,” Chief Financial Officer Frank Simpkins told analysts.
For fiscal year 2013 ending June 30, the company projected earnings would range between $2.60 and $2.80 a share, down from previous guidance of $3.40 to $3.70 a share.
Kennametal said it expected sales would fall between 2 percent and 4 percent. It previously projected sales would grow between 3 percent and 6 percent. The projections include the contribution from the acquisition of Stellite, a U.K.-based maker of high-performance alloys-based metals in March.
Kennametal previously had expected demand would begin to rebound around January. “It now appears the recovery has been deferred for at least one, maybe two, quarters,” said Simpkins.
Thomas Olson is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or at email@example.com.