Q3 Earnings Highs And Lows: Kennametal (NYSE:KMT) Vs The Rest Of The Professional Tools and Equipment Stocks

As the third quarter earnings season comes to a close, it's time to take stock of the performance of Kennametal (NYSE:KMT) and its peers in the professional tools and equipment sector. Kennametal, a leading producer of engineered cemented carbide products and specialty wear-resistant components, reported mixed results in Q3, with revenues falling short of analysts' expectations but earnings beating estimates. Let's dive into the details and compare Kennametal's performance with its competitors.



Kennametal reported revenues of $536 million in Q3, up 5% year-over-year, but this print fell short of analysts' expectations by 1.3%. The company's earnings per diluted share (EPS) came in at $0.39, beating analysts' estimates by 1.2%. Kennametal's organic sales growth of 8% and a favorable business days effect of 1% helped drive revenues, while higher raw material costs and wages offset some of the gains. The company's operating margin was 9.8%, down from 10.4% in the prior year quarter, primarily due to higher raw material costs and under-absorption in the Infrastructure segment.



Comparing Kennametal's performance to its peers, we can see that the company's revenue growth of 5% was lower than the average revenue growth of 12.27% reported by its peers in the professional tools and equipment sector. However, Kennametal's operating margin of 9.8% was in line with the industry average of 10%. Some of Kennametal's competitors, such as Luxfer (NYSE:LXFR), reported strong earnings and revenue growth, while others, like Icahn Enterprises (NASDAQ:IEP), struggled with declining revenues and earnings.



Kennametal's Metal Cutting segment performed well in Q3, with revenues up 6% year-over-year and an operating margin of 13.1%. The Infrastructure segment, however, struggled with a 3% decrease in revenues and an operating margin of 2.6%. In comparison, some of Kennametal's peers had mixed results in their respective segments. For instance, Illinois Tool Works (NYSE:ITW) reported a 1.6% decrease in revenues, while Luxfer (NYSE:LXFR) saw a 2.1% increase. Icahn Enterprises (NASDAQ:IEP) experienced a significant 25.7% decrease in revenues, and L.B. Foster (NASDAQ:FSTR) reported a 5.4% decrease. John Bean (NYSE:JBT) saw a 12.4% increase in revenues, but this growth was not as high as Kennametal's organic sales growth.

In conclusion, Kennametal's Q3 earnings were a mixed bag, with revenues falling short of analysts' expectations but earnings beating estimates. The company's revenue growth of 5% was lower than the average revenue growth of its peers, but its operating margin was in line with the industry average. Kennametal's Metal Cutting segment performed well, while the Infrastructure segment struggled. As the earnings season comes to a close, investors should keep an eye on Kennametal and its competitors to see how they fare in the coming quarters.