Kennametal posts 29 percent drop in profit
High-tech manufacturer Kennametal Inc. on Thursday posted a 29 percent drop in quarterly earnings and warned that business would be pressured by deeper deterioration in the coming months in the global markets it serves.
The Unity-based company, which makes machining tools for the manufacturing industry, reported a profit of $54 million, or 67 cents a share, for the quarter ended March 31 compared with $75 million, or 93 cents a share, the year earlier.
Kennametal, which employs about 13,000, serves customers in 60 countries in aerospace, energy, infrastructure, industrial production and other sectors.
Sales in the January-March quarter were hurt by “another difficult period for industrial and infrastructure activity globally,” CEO Carlos Cardoso said in a statement.
“It wasn't a bad quarter, but they are fighting some headwinds,” said Walt Liptak, managing director of Global Hunter Securities in Chicago. He cited continued weakness in European markets, a stubborn recovery of China's economic momentum and a mixed picture for demand in North America.
Kennametal projects that sales for the fiscal year ending June 30 will fall between 5 percent and 6 percent, a wider drop than the 2 percent to 4 percent decrease it had projected previously.
Sales last quarter decreased 6 percent to $655 million, compared with $696 million a year ago. Financial results included a $27 million gain from the sale of the company's stake in a subsidiary in India. Kennametal retains a 75 percent interest.
Kennametal stock closed up $1.52 on Thursday at $38.91.
Thomas Olson is a staff writer for Trib Total Media. He can be reached a 412-320-7854 or at email@example.com.