(RTTNews) - Kennametal Inc. (KMT: News ), a tooling, engineered components and advanced materials provider, Thursday reported a loss for the first quarter from a profit last year, reflecting lower sales from both Metalworking Solutions & Services Group and Advanced Materials Solutions Group. Loss reported for the quarter, however, was way ahead of analysts' expectations.

Kennametal's loss from continuing operations for the first quarter was $7.82 million or $0.10 per share, compared to an income of $35.80 million or $0.47 per share in the previous year.

Net loss attributable to the company for the quarter was $9.82 million or $0.12 per share, compared to an income of $35.47 million or $0.47 per share last year. Results for the quarter include restructuring and related charges of $5.26 million and divestiture related charges of $1.28 million.

On an adjusted basis, net loss for the quarter was $3.27 million or 0.04 per share, compared to a profit of $42.87 million or $0.57 per share last year.

On average, 12 analysts polled by Thomson Reuters expected the company to report a loss of $0.15 per share. Analysts' estimates typically exclude special items.

The Latrobe, Pennsylvania-based company's total sales for the quarter declined 36% to $409.39 million from $643.37 million a year ago. Analysts expected a revenue of $408.72 million for the quarter.

Sales declined organically by 36%, while the favorable impact of 3% from a business acquisition made in the prior fiscal year was offset by a 3% decrease from unfavorable foreign currency effects.
By segment, Metalworking Solutions & Services Group sales decreased 43% from the prior year quarter, driven by an organic sales decline of 39% and unfavorable foreign currency effects of 4%. Advanced Materials Solutions Group sales decreased 25% from the prior year quarter, driven by a 30% organic decline and a 2% unfavorable impact from foreign currency effects.

Operating expense declined to $116.16 million from $150.96 million last year. Interest expense declined to $6.37 million from $7.08 million in the previous year.

Kennametal also declared a quarterly cash dividend of $0.12 per share, payable November 20, 2009 to shareowners of record as of the close of business on November 5, 2009.

Looking forward, the company expects earnings for fiscal 2010 to be in the range of $0.50 to $0.70 per share, on sales projected to decline 5% to 10% from last year on an organic basis. Analysts currently expect earnings of $0.49 per share, on revenues of $1.86 billion for the fiscal year.

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