Kennametal Inc., a supplier of tooling and industrial materials, reported better-than-expected second-quarter results, sending its stock up 1.7% on Monday.
Kennametal’s (KMT) 2Q adjusted earnings of $0.16 per share came in ahead of the Street’s estimates of $0.09 but declined from $0.17 per share in the year-ago period. Its revenue of $440.5 million topped analysts’ expectations of $423.6 million but fell 13% year-over-year.
The double-digit decline in revenue reflects a 14% drop in organic sales. Meanwhile, divestiture negatively impacted its sales by 1%. However, foreign currency exchange rates had a favorable impact on net sales.
While the top-line declined on a year-over-year basis, it improved 10% sequentially, driven by improving demand, particularly in the transportation and general engineering end-markets.
Kennametal’s CEO Christopher Rossi said, “These end-market trends coupled with the progress on our growth initiatives and continued delivery of simplification/modernization benefits led to solid margin improvement and strong free operating cash flow in the quarter.” (See Kennametal stock analysis on TipRanks)
On Jan. 15, Jefferies analyst Stephen Volkmann raised the stock’s price target to $48 (22.1% upside potential) from $40 and maintained a Buy rating. In a note to investors, the analyst said that the December stimulus package should drive growth in industrials.
The Street has a cautiously optimistic outlook with a Moderate Buy consensus rating based on 2 Buys and 4 Holds. The average analyst price target of $37 implies downside potential of about 5.9% to current levels. Shares have gained about 29.3% over the past year.
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NXP Semiconductors provided a first-quarter revenue outlook which exceeded analysts’ expectations as the chipmaker reported better-than-expected 4Q results. However, shares declined 3.2% in Monday’s extended trading session.
NXP Semiconductors’ (NXPI) 4Q earnings of $2.22 per share grew 12.1% year-over-year, and topped analysts’ expectations of $2.10 per share. The company’s revenues of $2.51 billion beat the Street's estimates of $2.46 billion, and increased about 9% year-over-year.
Its adjusted gross margin stood at 52.9%, compared to consensus estimates of 52.7% and the company’s guidance range of 50.9%-51.6%. The operating margin of 30.5% also came in ahead of analysts’ expectations of 29.8% in 4Q.
As for 1Q, the company expects to generate revenues in the range of $2.475-2.625 billion, versus consensus estimates of $2.32 billion. NXP forecasted gross margin in the range of 53.2%-53.8%, compared to a consensus of 53%. The company anticipates its 1Q operating margin to be in the range of 29.8%-30.9%, which came in above analysts’ expectations of 28.5%. (See NXP Semiconductors stock analysis on TipRanks)
Following the results, Oppenheimer analyst Rick Schafer maintained a Hold rating on the stock.
In a note to investors, Schafer said, “4Q upside was led by mobile (13% ahead of consensus estimate and up 23% Y/Y), which more than offset comm infrastructure declines (8% below consensus estimate and down 14% Y/Y). Auto was up 24% Q/Q (+43% Q/Q in 3Q) and 9% Y/Y as the industry recovers from 2Q trough. Mobile was up 21% Q/Q reflecting strong iPhone 12 demand. Channel inventory dipped to 1.6 months (vs. historical 2.4 months), as demand likely outpaced supply given widespread reports of auto supply chain shortages.”
Meanwhile, the rest of the Street has a cautiously optimistic outlook with a Moderate Buy consensus rating based on 11 Buys and 5 Holds. The average analyst price target of $181.73 implies upside potential of about 6% to current levels. Shares increased 37% in one year.
Meanwhile, the TipRanks’ stock investors tool shows that investors currently have a Very Negative stance on NXPI.
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Shares of ON Semiconductor closed 6.4% higher on Monday after the US chipmaker reported 4Q results that topped analysts’ expectations amid robust demand for its automotive products.
ON Semiconductor’s (ON) 4Q adjusted earnings surged 16.7% to $0.35 per share year-over-year and beat Street estimates of $0.28. Its revenues increased 3% to $1.45 billion and surpassed the consensus mark of $1.36 billion.
The semiconductor supplier’s quarterly results benefited from an improvement in the global macroeconomic environment and recovery in the automotive end-market. (See ON Semiconductor stock analysis on TipRanks)
For 1Q, ON Semiconductor forecasted revenues between $1.41 billion to $1.51 billion.
Following the earnings release, Mizuho Securities analyst Vijay Rakesh raised the stock’s price target to $40 (9% upside potential) from $39 and reiterated a Buy rating.
In a note to investors, Rakesh wrote, “With its strong automotive position, new CEO focused on accretive growth, tight supply, Product & Foundry repositioning, and an activist investor, we see ON well positioned.”
Overall, the Street has a bullish outlook, with a Strong Buy consensus rating based on 13 Buys, 1 Hold, and 1 Sell. The average analyst price target of $39.71 implies upside potential of about 8.2% to current levels. Shares have gained 58.6% in the past year.
Meanwhile, TipRanks’ Hedge Fund Trading Activity tool shows that confidence in ON is currently Very Negative as 8 hedge funds trimmed their cumulative holdings of the stock by 1.2 million shares in the last quarter.
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