On November 1, 2023, Kennametal Inc (KMT, Financial) announced its fiscal 2024 first quarter results. The company reported earnings per diluted share (EPS) of $0.37, up from $0.34 in the prior year quarter. Sales for the quarter were $492 million, compared to $495 million in the prior year quarter.
Financial Highlights
The company's operating income was $45 million, or 9.2 percent of sales, compared to $49 million, or 9.8 percent of sales, in the prior year quarter. The decrease in operating income was primarily due to higher wages, general inflation, lower sales volumes, higher raw material costs, and restructuring and related charges of approximately $4 million in the current quarter.
The reported effective tax rate (ETR) for the quarter was 21.0 percent compared to 27.5 percent in the prior year quarter. The year-over-year change in ETR is primarily due to a benefit of approximately $6 million from a change in unrecognized tax benefits, partially offset by a settlement related to tax litigation in Italy of approximately $3 million.
Shareholder Returns
Kennametal returned approximately $30 million to shareholders; $14 million in share repurchases and $16 million in dividends. The company repurchased 505 thousand shares of Kennametal common stock for $14 million under its share repurchase program.
Outlook
For the second quarter of fiscal 2024, Kennametal expects sales to be between $490 - $515 million, with adjusted EPS expected to be $0.20 - $0.30. For the full year, the company anticipates sales to be between $2.1 - $2.2 billion, with adjusted EPS expected to be $1.75 - $2.15.
Segment Results
Metal Cutting sales increased 3 percent from the prior year quarter to $308 million, while Infrastructure sales decreased 5 percent to $184 million. The increase in Metal Cutting operating income was primarily due to higher price realization and operational efficiencies including restructuring savings.
Dividend Declared
Kennametal announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share, payable on November 21, 2023 to shareholders of record as of the close of business on November 7, 2023.
Explore the complete 8-K earnings release (here) from Kennametal Inc for further details.
