Kennametal's Q1 Earnings & Revenues Top Estimates, Increase Y/Y

Kennametal Inc. KMT reported first-quarter fiscal 2026 (ended Sept. 30, 2025) adjusted earnings of 34 cents per share, which surpassed the Zacks Consensus Estimate of 24 cents. The bottom line increased 18% from the year-ago figure.

KMT’s Revenue Details

Kennametal’s revenues were $498 million, which increased 3% from the year-ago quarter’s figure. Organic sales rose 3% year over year. Foreign currency translation had a positive impact of 1% on sales, while divestitures had an adverse impact of 1%.  KMT’s revenues beat the Zacks Consensus Estimate of $473 million.

On a geographical basis, revenues from American operations increased 4.2% year over year to $247.6 million, whereas sales from the Europe, the Middle East and Africa region were $153.3 million, up 5.1% from the year-ago quarter. Sales from the Asia Pacific belt decreased 1.2% to $97.1 million.

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

The Metal Cutting segment’s revenues of $310.6 million increased 5% year over year. Organic revenues grew 3% and currency exchange had a positive impact of 2% year over year. The Zacks Consensus Estimate for Metal Cutting’s revenues was pegged at $293 million.

The Infrastructure segment’s revenues totaled $187.3 million, up 1% year over year. Organic revenues increased 3% and currency exchange had a positive impact of 1% year over year. This was partially offset by the negative impact of 3% from divestitures. The consensus estimate for Infrastructure’s revenues was pegged at $180 million.

Kennametal Inc. Price, Consensus and EPS Surprise

Kennametal Inc. price-consensus-eps-surprise-chart | Kennametal Inc. Quote

KMT’s Margin Profile

Kennametal’s cost of goods sold increased 3.8% year over year to $343.4 million. The gross profit rose 2.3% year over year to $154.6 million, while the margin decreased 30 basis points (bps) to 31%. Operating expenses were $113 million, up 1.2% year over year.

Operating income increased 4.3% year over year to $37.6 million. Operating margin remained relatively stable year over year at 7.5%. The results were driven by favorable impacts of pricing and restructuring savings, offset by higher raw material costs, increased compensation costs and general inflation.

Interest expenses were $6.2 million, down 1.6% from the year-ago quarter’s figure. The adjusted effective tax rate was 25.2%.

Kennametal’s Balance Sheet and Cash Flow

While exiting the fiscal first quarter, Kennametal’s cash and cash equivalents were $103.5 million compared with $140.5 million at the end of fiscal 2025. Long-term debt was $597 million compared with $596.8 million at the end of fiscal 2025.

In the first three months of fiscal 2025, Kennametal generated net cash of $17.5 million in operating activities compared with $45.7 million in the previous fiscal year’s comparable period. Capital invested in purchasing property, plant and equipment was $23 million, down 6.9% from $24.7 million in the prior fiscal year period. Free operating cash flow was a negative $5.5 million compared with $21.1 million in the previous fiscal year’s period.

KMT paid a dividend of $15.1 million and repurchased shares worth $10 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 Nov. 10, 2025. The disbursement will be made on Nov. 24.

Kennametal’s Guidance

KMT has updated its fiscal 2026 (ending June 2026) outlook. The company currently anticipates sales to be in the range of $2.10-$2.17 billion, higher than $1.95-$2.05 billion projected earlier. Adjusted earnings per share are anticipated to be in the range of $1.35-$1.65, compared with the previous projection of 90 cents-$1.30. Free operating cash flow is expected to be 100% of net income (adjusted). Capital spending is expected to be approximately $90 million.

For second-quarter fiscal 2026 (ending December 31, 2025), Kennametal expects sales to be in the range of $500-$520 million. Adjusted earnings per share are anticipated to be in the range of 30-40 cents.

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.

Some other top-ranked stocks are discussed below:

Flowserve Corporation FLS presently carries a Zacks Rank of 2. FLS’ earnings surpassed the consensus estimate thrice and missed once in the trailing four quarters. The average earnings surprise was 10.5%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2025 earnings has increased 1.8%.

Trimble Inc. TRMB presently carries a Zacks Rank of 2. TRMB’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 7.5%. In the past 60 days, the Zacks Consensus Estimate for Trimble’s 2025 earnings has been stable.

Crane Company CR currently carries a Zacks Rank of 2. CR has an impressive earnings surprise history, having outperformed the consensus estimate in each of the preceding four quarters, with an average surprise of 9.3%. In the past 60 days, the Zacks Consensus Estimate for Crane’s 2025 earnings has increased 2.1%.

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

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