Kennametal Cuts FY16 Outlook; Stock Plunges

(RTTNews) - Kennametal Inc. (KMT) announced that it cut its fiscal 2016 guidance, because of demand declines in end markets, especially China. Its shares fell about 19% to $20.65.

The company now expects as much as a 30-60% decrease in previously announced guidance for fiscal 2016 adjusted earnings per share, as a result of lower revenue expectations and the company's current lack of visibility to its end markets. Analysts polled by Thomson Reuters expect the company to report earnings of $1.50 per share for the fiscal year. Analysts' estimates typically exclude special items. Previously, the company expected adjusted earnings per share to be in the range of $1.50 to $1.70 for the fiscal year.

The company's revenue expectations have been negatively impacted by further declines in its end markets as evidenced by continued declines in industrial production indices since prior guidance was issued in early November, particularly China automotive and US and China coal mining, as well as further reductions in O&G activity. Earlier, the company expected fiscal 2016 total sales to decline in the range of 10 to 14 percent and organic sales to decline in the range of 6 to 10 percent

The company noted that it will provide more detail at the time of the February 2016 Earnings call.

KMT closed Monday trading at $25.57, down $0.03 or 0.12%. In after hours, the stock further dropped $4.92 or 19.24%.