Tooling products maker Kennametal reported its 2022 fiscal first quarter and full-year fiscal results on Nov. 1, and like most other major industrial suppliers in the current earnings reporting season, they were led by continued major year-over-year sales gains in the July-September period.
Pittsburgh-based Kennametal reported Q1 sales of $484 million, up 21 percent year-over-year, including organic growth of 19 percent. It follows Q4 overall growth of 36 percent and organic growth of 29 percent. Sequentially, Q1 sales were down 5.8 percent year-over-year.
The company's Q1 operating profit was $55 million on margin of 11.3 percent, compared to a loss of $17 million and -4.3 percent margin a year earlier, and $61 million and 11.8 percent in Q4, respectively. Kennametal attributes the growth in Q1 operating profit due to organic sales growth, significantly smaller charges compared to the year prior, pricing and product mix, partially offset by $15 million that went toward restoring salaries and other cost-control measures taken during 2020. Q1 adjusted operating profit was $56 million on 11.6 percent margin, compared to $11 million and 2.9 percent, respectively, a year earlier.
Kennametal's Q1 net profit was $38 million, a reversal from a $21 million loss a year earlier, and up from $35 million in Q4.
"The continued execution of our commercial and operational excellence initiatives in an improving market environment resulted in strong performance this quarter, with sales and free operating cash flow outpacing normal quarterly sequential patterns," said Christopher Rossi, Kennametal president and CEO. "The results show substantial year-over-year margin improvement, driven by strong operating leverage and timely, strategic pricing actions."
By business segment in Q1:
- Metal Cutting sales of $298 million jumped 20 percent year-over-year, driven by organic growth of 19 percent. Operating profit was $29 million on 9.8 percent margin, compared to $33 million/10.6 percent margin in Q4 and $29 million/9.8 percent margin a year earlier.
- Infrastructure sales of $185 million jumped 21 percent year-over-year, driven by organic growth of 19 percent. Operating profit was $26 million on 14.1 percent margin, compared to $28 million/13.5 percent in Q4 and $7 million/4.8 percent a year earlier.
Looking forward, Kennametal is forecasting Q2 sales growth of 9 to 14 percent year-over-year.
Kennametal's 2021 full year sales totaled $1.84 billion, down 2.3 percent from 2020, while net profit of $54 million likewise dwarfed a $6 million loss in 2020.