We’re in the midst of another quarterly financials reporting period for publicly-traded industrial distributors and manufacturers. Read below to learn about the most recent sales and revenue numbers for companies MDM typically covers, including: Kennametal, Eaton, Rockwell Automation, Caterpillar, Regal Rexnord, and Illinois Tools Works (ITW).
Metalworking supplier Kennametal reported its 2023 fourth quarter and full year financial results on Aug. 1, showing a modest continued deceleration in sales growth.
The Pittsburgh-based company posted total 4Q sales of $550 million, up 3.8% year-over-year and up 2.6% from 3Q. The 4Q sales growth was driven by 7% organic sales growth. Gross margin of 31.9% dipped 10 basis points year-over-year, while operating profit of $56 million on 10.2% margin was down from $63 million and 11.8% margin of a year earlier.
Kennametal reported 4Q net profit of $36 million, down from $42 million of a year earlier. The company had 4Q adjusted EBITDA of $92 million at 16.7% margin.
By business segment in 4Q:
- Metal Cutting sales of $337 million increased 6% year-over-year, driven by 10% organic growth. Operating profit of $37 million on 11.0% margin topped the $34 million and 10.8% margin of a year earlier.
- Infrastructure sales of $213 million dipped 0.1% year-over-year, which the company attributed to unfavorable currency exchange and one fewer business day. Operating profit of $19 million on 9.0% margin trailed the $29 million and 13.7% margin of a year earlier.
For the full year, Kennametal’s 2023 total sales of $2.08 billion improved 3.3% vs. 2022, driven by 9% organic growth, partially offset by -5% impact from unfavorable currency exchange.
The company’s 2023 operating profit of $192 million on 9.3% margin trailed 2022’s $218 million and 10.8% margin.
Kennametal’s 2023 adjusted EBITDA was $323 million at 15.5% margin.
During 2Q, Kennametal announced an initiative to streamline its cost structure while continuing to invest in its high-return Commercial and Operational Excellence initiatives. The company said this action is currently expected to deliver an annualized run rate pre-tax savings of about $20 million by the end of fiscal 2024, while total incurring total charges of about $20 million, including $7 million in 2Q.
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Reported by the company on Aug. 1, construction equipment manufacturer Caterpillar reported 2Q23 total sales of $17.3 billion that jumped 22% year-over-year, which the company primarily attributed to higher sales volume and price realization. The year-over-year growth figure surpassed 1Q’s 18% increase.
CAT’s operating profit of $3.65 billion and margin of 21.1% likewise jumped from the $1.71 billion and 13.6% of a year earlier.
By business segment during 2Q:
- Construction Industries sales of $7.15 billion increased 19% year-over-year. Segment profit of $1.80 billion jumped 82%.
- Resource Industries sales of $3.56 billion increased 20% year-over-year. Segment profit of $740 million jumped 108%.
- Energy & Transportation sales of $7.22 billion increased 27% year-over-year. Segment profit of $1.27 billion jumped 93%.
CAT’s 2Q net profit of $2.92 billion jumped 74.7% year-over-year.
MIlwaukee-based industrial automation and digital transformation technologies provider Rockwell Automation reported its 3Q23 results, led by total sales of $2.24 billion that were up 13.7% year-over-year. Organic sales likewise increased 13.2%.
The company’s 3Q operating profit of $373 million increased 15.6% year-over-year, with operating margin of 21.% up 30 basis points.
The company’s 3Q net profit of $400 million topped the $298 million of a year ago.
Rockwell Automation raised its fiscal 2023 outlook for sales growth now projected at 14.0-16.0% (organic identical), up from its previous guidance of 12.5%-16.5% (13.0%-17.0% organic).
By business segment during 3Q23:
- Intelligence Devices sales of $968 million increased 10.2% year-over-year, with organic sales up 8.2%. Operating profit of $163 million dipped $10 million from a year earlier, while operating margin of 16.8% likewise fell from 19.7% of a year ago.
- Software & Control sales of $751 million increased 23.7% year-over-year, with organic sales up 24.4%. Operating profit of $262 million topped last year’s $191 million, while operating margin likewise increased 340 bps to 34.8%.
- Lifecycle Services sales of $520 million increased 7.5% year-over-year, with organic sales up 8.0%. Operating profit of $48 million topped last year’s $45 million, with operating margin down 10 bps to 9.3%.
Dublin, Ireland-based power management supplier Eaton reported its 2Q23 financials on Aug. 1, led by company 2Q record sales of $5.9 billion that improved 13% year-over-year, which the company said was driven entirely by organic growth.
Operating profit of $1.26 billion increased 21% year-year-year, with margin of 21.6% up 150 basis points.
Eaton’s 2Q23 net profit of $745 million increased 23.8% year-over-year.
By business segment in 2Q23:
- Electrical Americas sales of $2.5 billion increased 19% year-over-year, driven entirely by organic growth. Operating profit was likewise a company record $669 million, up 35%, while operating margin of 26.4% jumped 320 bps.
- Electrical Global sales of $1.6 billion increased 5% year-over-year, with organic sales up 6%. Operating profit of $290 million increased 3%, while operating margin of 18.5% decreased 40 bps.
- Aerospace sales of $848 million increased 13% year-over-year, driven entirely by organic growth. Operating profit of $191 million increased 17%, while operating margin of 22.5% increased 60 bps.
- Vehicles sales of $751 million increased 6% year-over-year, driven entirely by organic growth. Operating profit of $115 million also increased 6%, while operating margin of 15.3% was flat.
Eaton raised its 2023 full year organic sales growth guidance to 10-12%, with increased margins of 21.3% at midpoint.
On July 31, Beloit, Wisconsin-based motors and powertrain maker Regal Rexnord reported 2Q23 total sales of $1.77 billion that jumped 31.1% year-over-year, largely driven by the company’s $5B acquisition of Altra Industrial Motion that was completed in late March of this year.
It followed a 5.7% year-over-year sales decline during 1Q23 and a 2% increase during 4Q22.
The Altra acquisition resulted in 2Q net profit that decreased $110 million year-over-year to $33 million and adjusted EBITDA that surged 34% to $380 million (21.5% margin).
Regal Rexnord’s 2Q organic sales decreased 9.1% year-over-year, compared to an 11.8% gain in 2Q22. Acquisitions represented 40.9% of the company’s 2Q net sales.
By business segment in 2Q:
- Automation & Motion Control sales of $473 million soared 143.7% year-over-year on the strength of the Altra addition, while pro forma organic sales increased 4.0%. Adjusted EBItDA margin was 25.3%.
- Industrial Powertrain Solutions sales of $699 million increased 65.5% year-over-year, powered by Altra, with pro forma organic sales up 0.6%. Adjusted EBITDA margin was 23.6%.
- Power Efficiency Solutions sales of $460 million fell 22.7% year-over-year, with organic sales down 22.2%. Regal Rexnord said the decline reflected weakness in global residential HVAC markets, particularly in the U.S., along with channel destocking. Adjusted EBITDA margin was 18.6%.
- Industrial Systems sales of $137 million dipped 0.8% year-over-year, with organic sales up 1.2%. Adjusted EBITDA margin was 7.1%.
Illinois Tool Works
On Aug. 1, Glenview, Illinois-based industrial products and equipment maker Illinois Tool Works reported total revenue of $4.1 billion that increased approximately 2% year-over-year, with organic growth of about 3%.
The company had record 2Q operating profit of $1.01 billion that increased 9% year-over-year and an operating margin of 24.8% that improved 170 basis points.
ITW’s 2Q net profit of $754 million topped the $738 million it had a year earlier.
By business segment during 2Q:
- Automotive OEM sales of $826 million increased 16% year-over-year, with operating margin up 250 bps to 16.8%. Organic sales increased 16%.
- Food Equipment sales of $654 million increased 6% year-over-year, with operating margin up 310 bps to 27.8%. Organic sales increased 7%.
- Test & Measurement/Electronics sales of $700 million increased 1% year-over-year, with operating margin up 70 bps to 23.2%. Organic revenue increased 1% (7% excluding semiconductors).
- Welding sales of $490 million increased 1% year-over-year, with operating margin up 460 bps to 33.9%. Organic revenue increased 1%.
- Polymers & Fluids sales of $459 million decreased 8% year-over-year, with operating margin up 80 bps to 25.9%. Organic revenue decreased 1%, and divestitures had a -6% impact.
- Construction Products sales of $526 million decreased 7% year-over-year, with operating margin up 170 bps to 29.3%. Organic revenue fell by 6%.
- Specialty Products sales of $423 million decreased 5% year-over-year, with operating margin down 90 bps to 26.0%. Organic revenue fell by 4%.