Kennametal Inc., Pittsburgh, Pennsylvania, USA, has announced its fourth quarter and full fiscal year results for 2018. In the fourth quarter 2018, the company reported sales of $646 million, up 14% from $565 million in the same quarter 2017. Full year sales were reported at $2,368 million, up 15% from $2,058 million for the full year 2017.
According to the company, sales growth in the fourth quarter 2018 was driven primarily by organic growth, and helped somewhat by favourable currency exchange impact and more business days. Sales were said to have grown in all segments, end-markets and regions.
Operating income for the quarter was $98 million, compared with $40 million in the fourth quarter 2017. Adjusted operating income was said to be $103 million, compared with $63 million Q4 2017. Net income attributable to Kennametal was $69 million, a significant increase compared to $25 million in the same period 2017.
For the full year 2018, operating income was reported to be $308 million, compared with $113 million in the previous year. Adjusted operating income was $323 million, compared with $189 million in the prior year. According to the company, adjusted operating income increased primarily due to organic sales growth, incremental restructuring benefits, favourable mix and currency exchange and modernisation benefits, but was partially offset by higher raw material costs, salary inflation and higher variable compensation expense due to higher than expected operating results.
“I am encouraged by the strong results of the quarter, and the progress we have made on our growth and margin expansion initiatives this year,” commented Chris Rossi, Kennametal President and CEO. “Every business segment reported significant growth and profitability improvement, and we continue to see strong end-market demand. The robust operating leverage is consistent with our expectations.”
The company stated in its outlook for the fiscal year 2019 that it expects strong end markets to continue, contributing to organic sales growth outlook in the range of 5–8%. Kennametal is said to be continuing initiatives in all three of its focus areas – growth, simplification and modernisation. Responding to current concerns over rising trade tariffs, the company stated that it does not expect tariffs to have a material effect on its sales or cost structure.
“We delivered 2018 results in-line with the multi-year profitability improvement plan we presented at our last Investor Day in December. And our fiscal 2019 plan is also on-track and represents another significant step forward in improved profitability for the company,” concluded Rossi.