Kennametal's Q4 Earnings Miss Estimates, Revenues Decline Y/Y

Kennametal Inc. KMT reported fourth-quarter fiscal 2025 (ended June 30, 2025) adjusted earnings of 34 cents per share, which missed the Zacks Consensus Estimate of 40 cents. The bottom line decreased 30.6% from the year-ago figure.

The company’s adjusted earnings were $1.34 per share in fiscal 2025, down 10.7% year over year.

KMT’s Revenue Details

Kennametal’s revenues were $516 million, which decreased 5% from the year-ago quarter’s figure. Organic sales declined 5% year over year. Business days did not have any impact in the quarter. KMT’s revenues missed the Zacks Consensus Estimate of $527 million.

In fiscal 2025, KMT reported net revenues of $1.97 billion, which decreased 4% year over year. 

On a geographical basis, revenues from American operations decreased 5% year over year to $254.3 million, whereas sales from the Europe, the Middle East and Africa region were $158.4 million, down 5% from the year-ago quarter. Sales from the Asia Pacific belt decreased 2% to $103.8 million.

Kennametal reports results under two business segments, namely Metal Cutting and Infrastructure. Its segmental performance for the fiscal fourth quarter is briefly discussed below:

The Metal Cutting segment’s revenues of $321 million decreased 4% year over year. Organic revenues declined 4%. The Zacks Consensus Estimate for Metal Cutting’s revenues was pegged at $323 million.

The Infrastructure segment’s revenues totaled $196 million, down 6% year over year. Organic revenues decreased 5% and currency exchange had a positive impact of 1% year over year. The consensus estimate for Infrastructure’s revenues was pegged at $204 million.

KMT’s Margin Profile

Kennametal’s cost of goods sold decreased 0.3% year over year to $370.8 million. The gross profit declined 15% year over year to $145.7 million, while the margin decreased 300 basis points (bps) to 28.2%. Operating expenses were $105.9 million, up 0.4% year over year.

Operating income decreased 48.9% year over year to $31.4 million. Operating margin declined 520 bps year over year to 6.1%. Lower sales and production volumes, higher raw material costs, increased wages and general inflation affected the results.

Interest expenses were $6.2 million, down 0.4% from the year-ago quarter’s figure. The adjusted effective tax rate was 25.7%.

Kennametal’s Balance Sheet and Cash Flow

While exiting the fiscal fourth quarter, Kennametal’s cash and cash equivalents were $140.5 million compared with $128 million in fourth-quarter fiscal 2024. Long-term debt was $596.8 million compared with the $596 million in the year-ago quarter.

In fiscal 2025, Kennametal generated net cash of $208.3 million in operating activities compared with $277.1 million in the previous fiscal year’s quarter. Capital invested in purchasing property, plant and equipment (net of the amount received on disposals) was $89 million, down 17.3% from $107.6 million in the prior fiscal year. Free operating cash flow was $121 million compared with $175 million in the previous fiscal year’s period.

KMT paid a dividend of $62 million and repurchased shares worth $60 million.

KMT’s Dividend Update

Kennametal announced that its board of directors approved a quarterly cash dividend of 20 cents per share to its shareholders of record as of Aug. 12, 2025. The disbursement will be made on Aug. 26.

Kennametal’s Guidance

KMT has provided its fiscal 2026 (ending June 2026) outlook. The company anticipates sales to be in the range of $1.95-$2.05 billion. Adjusted earnings per share are anticipated to be in the range of 90 cents-$1.30. Free operating cash flow is expected to be 120% of net income (adjusted).

Capital spending is expected to be approximately $90 million.

KMT’s Zacks Rank

The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

Dover Corporation DOV reported earnings of $2.44 per share in second-quarter 2025, beating the Zacks Consensus Estimate of $2.39. This compares with earnings of $2.36 per share a year ago.

Dover posted revenues of $2.05 billion in the quarter, surpassing the Zacks Consensus Estimate by 0.6%. This compares with year-ago revenues of $2.18 billion.

Teck Resources Limited TECK came out with earnings of $0.27 per share in the second quarter of 2025, beating the Zacks Consensus Estimate of $0.2. This compares with earnings of $0.58 per share a year ago.

Teck Resources posted revenues of $1.46 billion in the quarter, missing the Zacks Consensus Estimate by 8.7%. This compares with year-ago revenues of $2.83 billion. 

Packaging Corporation of America PKG reported earnings of $2.48 per share, beating the Zacks Consensus Estimate of $2.44. This compares with earnings of $2.2 per share a year ago.

Packaging Corp. posted revenues of $2.17 billion in the quarter, surpassing the Zacks Consensus Estimate by 0.5%. This compares with year-ago revenues of $2.08 billion.

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This article originally published on Zacks Investment Research (zacks.com).

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