Kennametal posted a 6% decline in sales in its latest fiscal quarter, but its earnings jumped after the company benefited from a federal manufacturing tax credit.
The Pittsburgh-based cutting tools and engineered components supplier reported $486 million in sales in the latest quarter, down from $516 million during the same period last year. Organic sales slipped by 3% over that span, while unfavorable currency exchange reduced the total by another 3%.
Kennametal President and CEO Sanjay Chowbey said "market headwinds" led to sales that were "slightly below the midpoint" of the company's forecast range — particularly pointing to weak conditions in the Americas and in its Europe, Middle East and Africa segment.
Sales in the company's metal cutting division were down 7% in the quarter to $304 million, while its smaller infrastructure segment saw a 4% dip in sales.
The company's earnings, however, climbed from $20.7 million in the earlier quarter up to $33.1 million in the latest three-month window, which officials attributed primarily to a $10 million benefit through a credit for advanced manufacturing included in the 2022 Inflation Reduction Act.
Kennametal also tweaked its sales forecast heading into the final quarter of its fiscal year. The company now expects full-year sales of between $1.97 billion and $1.99 billion, compared to the $1.95 billion to $2 billion projection at the midway point of the year.
"Like many companies, the recent uncertainty regarding tariff policies has affected Kennametal, however, we intend to mitigate the direct effect of tariffs on our business and will pursue new opportunities to take share," Chowbey said.
