Global slowdown drops Kennametal earnings, sales
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The global economic slowdown hit Kennametal Inc. hard in the quarter ending March 31, as it earned just 3 cents per share from net income that plunged to just $2.24 million on sales that dropped to $483.0 million, a 19% decline from a year ago.
The Pittsburgh-based industrial toolmaker said Monday that its earnings per share fell from 82 cents a share in the January through March 31 quarter of 2019, on net income of $70.1 million. Sales for the prior year were $597.2 million.
Kennametal CEO Chris Rossi said in a statement that covid-19 will create “a significant operational and market headwind.” Rossi noted the pandemic is creating extensive uncertainty and “limited visibility into our end markets.”
Most of Kennametal’s production facilities have remained open because the company is considered an essential business by governments around the world.
As a result of the covid-19 slowdown in the global economy, Kennametal said it has “preemptively” taken $500 million out of its $700 million revolving credit agreement.
Despite borrowing $500 million, Kennametal said it has adequate liquidity and access to credit to meet its cash flow requirements.
Kennametal declared a quarterly cash dividend of 20 cents per share, payable on May 27 to shareholders as of May 12.