Kennametal reported fiscal 2026 first‑quarter revenue of $498 million, up 3 % from $482 million a year earlier, and adjusted earnings per share of $0.34, a $0.11 beat over the consensus estimate of $0.23. Operating income stood at $38 million, giving a 7.5 % margin that matched the prior year quarter, while adjusted operating income rose to $41 million, an 8.2 % margin that improved from 7.6 % in the previous quarter. Free operating cash flow turned negative at $5 million, largely driven by a build‑up in inventory and higher accounts‑receivable balances. The company also announced a quarterly cash dividend of $0.20 per share, payable on November 24 to shareholders of record as of November 10.
Metal Cutting sales increased 5 % to $311 million, and Infrastructure sales grew 1 % to $187 million, together accounting for the majority of the revenue rise. The modest growth in Infrastructure reflects steady demand in the construction and mining sectors, while the stronger Metal Cutting performance was supported by higher pricing and a shift toward higher‑margin tooling products. The segment mix shift helped offset cost inflation in raw materials and labor, contributing to the maintenance of operating margins.
Operating margins remained flat at 7.5 % year‑over‑year, while the adjusted margin expanded to 8.2 %. The margin stability is largely attributable to pricing actions and tariff surcharges that offset the impact of higher commodity costs, and to the first‑phase savings from Kennametal’s plant‑consolidation program. The program is projected to deliver $125 million in annualized pre‑tax savings by fiscal 2028, and the current quarter’s margin improvement signals that the restructuring is already delivering tangible benefits.
Kennametal raised its full‑year 2026 outlook, projecting revenue of $2.10 billion to $2.17 billion and adjusted earnings per share of $1.35 to $1.65. The upward revision reflects management’s confidence in continued demand growth in key markets and the ability to sustain cost‑control gains. The guidance also signals that the company expects to maintain its margin profile while executing the remaining phases of its restructuring plan.
President and CEO Sanjay Chowbey said the quarter “started off strong with share gains and modest end‑market improvements compared to our previous expectations, resulting in sales and adjusted EPS that exceeded the upper end of our outlook.” He added that the company remains focused on “above‑market growth, cost‑structure improvement and shaping a smarter portfolio,” underscoring its commitment to long‑term value creation.
The market reacted strongly to the earnings beat, with investors responding to the company’s first quarter of organic growth in two years and the raised full‑year guidance. Analysts noted the company’s ability to deliver a significant earnings and revenue beat while maintaining margin stability, and they highlighted the positive implications of the ongoing restructuring program for future profitability.
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