Kennametal, Inc. (KMT) Slides on Lower Fiscal 2016 Earnings
Shares of Latrobe, Pennsylvania, based Kennametal, Inc. (KMT) fell on Tuesday, against the backrop of a strong day in stocks overall. Kennametal's stock was down 19.01%, falling $4.86 per share, to close at $20.71, on volume of 8,563,280 shares. The company announced lower earnings guidance for its 2016 fiscal year, citing weaker end market conditions as the reason.
Founded in 1938, Kennametal, Inc. provides tooling, engineered components and advanced materials that are consumed in production processes.
After the market closed on Monday, Kennametal announced that it's earnings would fall in response to the troubles in the energy sector, the slowdown in the Chinese automotive market, and weakness in the coal mining markets in both the US and China. The company projects that adjusted earnings per diluted share will fall by between 30% and 60% for it's 2016 fiscal year, which will end on June 30.
Due to declines in the energy sector as well as the Chinese economy, Kennametal's stock price has been weak. The stock has fallen by more than 8% since November 3, when the company announced lower than expected results for its 2016 fiscal first quarter, that ended on September 30. Monday's announcement is likely to continue to support selling pressure.
"Our served end markets are experiencing significant volatility and we are being challenged by the current global macroeconomic environment. As a result, our visibility into our end markets is poor and we have decided to reduce guidance for fiscal 2016," said Kennametal President and CEO, Don Nolan. "Despite weak market conditions we continue to make meaningful progress on critical initiatives to strengthen our foundation and ultimately grow our business, which we will outline in our meeting with investors tomorrow. When market conditions improve, we are confident that Kennametal will deliver substantially improved results."
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