Kennametal Earnings: What To Look For From KMT

Industrial materials and tools company Kennametal (NYSE:KMT) will be reporting earnings this Wednesday morning. Here’s what investors should know.

Kennametal beat analysts’ revenue expectations by 4.3% last quarter, reporting revenues of $498 million, up 3.3% year on year. It was an incredible quarter for the company, with an impressive beat of analysts’ organic revenue estimates and EPS guidance for next quarter exceeding analysts’ expectations.

Is Kennametal a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, analysts are expecting Kennametal’s revenue to grow 8.8% year on year to $524.4 million, a reversal from the 2.7% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.38 per share.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Kennametal has missed Wall Street’s revenue estimates five times over the last two years.

Looking at Kennametal’s peers in the industrial machinery segment, some have already reported their Q4 results, giving us a hint as to what we can expect. GE Aerospace delivered year-on-year revenue growth of 17.6%, beating analysts’ expectations by 13.9%, and Crane reported revenues up 6.8%, topping estimates by 1.9%. GE Aerospace traded down 7.7% following the results while Crane was also down 11.5%.

Read our full analysis of GE Aerospace’s results here and Crane’s results here.

There has been positive sentiment among investors in the industrial machinery segment, with share prices up 7.1% on average over the last month. Kennametal is up 19.5% during the same time and is heading into earnings with an average analyst price target of $30.25 (compared to the current share price of $35).

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