Kennametal posted a jump in sales and dramatic increases in profit and earnings in its latest fiscal quarter, company officials announced last week.
The manufacturer of cutting tools and engineered components reported $592.6 million in sales in the first three months of the year, an increase of 22% over the same period early last year. The company’s gross profit climbed from $156.4 million to nearly $208 million, while operating income and net income jumped from $44 million and $33 million, respectively, to $79.4 million and $61.1 million. Kennametal's operating margin also rose from 9.1% to 13.1% year-over-year.
Sanjay Chowbey, the company’s president and CEO, said that the higher-than-expected sales and earnings totals reflected an “unprecedented rise in tungsten pricing and stronger volume.” Prices for tungsten, a key component in Kennametal’s lineup, have soared to record levels amid export controls imposed by China and other factors.
"Our team is advancing volume momentum from improving end markets, pursuing share gains through growth initiatives, and executing on opportunities in a dynamic tungsten market,” Chowbey said in a statement.
Kennametal reported sales of $357.9 million in its metal cutting segment, up 18% year-over-year; its infrastructure division saw sales increase by 29% to $234.6 million.
The company also raised its annual outlook heading into the final quarter of its fiscal year. Kennametal officials now expect sales of between $2.33 billion to $2.35 billion for the year and adjusted earnings of $3.75 to $4 per share.
