KMT

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Kennametal (NYSE:KMT) and the rest of the professional tools and equipment stocks fared in Q2. Automation that increases efficiency and connected equipment that collects analyzable data have been trending, creating new demand. Some professional tools and equipment companies also provide software to accompany measurement or automated machinery, adding a stream of recurring revenues to their businesses. On the other hand, professional tools and equipment companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings. The 8 professional tools and equipment stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.8% while next quarter’s revenue guidance was 14.3% above. In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results. Involved in manufacturing hard tips of anti-tank projectiles in World War II, Kennametal (NYSE:KMT) is a provider of industrial materials and tools for various sectors. Kennametal reported revenues of $736.6 million, up 42.6% year on year. This print exceeded analysts’ expectations by 1.3%. Overall, it was a stunning quarter for the company with EPS guidance for next quarter exceeding analysts’ expectations and a beat of analysts’ EPS estimates. Kennametal scored the fastest revenue growth and highest full-year guidance raise among its peers. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 13.4% since reporting and currently trades at $31.24. Is now the time to buy Kennametal? Access our full analysis of the earnings results here, it’s free. With an iconic “STANLEY” logo which has remained virtually unchanged for over a century, Stanley Black & Decker (NYSE:SWK) is a manufacturer primarily catering to the tool and outdoor equipment industry. Stanley Black & Decker reported revenues of $3.96 billion, flat year on year, in line with analysts’ expectations. The business had a very strong quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates. The market seems happy with the results as the stock is up 8.1% since reporting. It currently trades at $101.84. Is now the time to buy Stanley Black & Decker? Access our full analysis of the earnings results here, it’s free. Headquartered in Ohio, Lincoln Electric (NASDAQ:LECO) manufactures and sells welding equipment for various industries. Lincoln Electric reported revenues of $1.22 billion, up 12% year on year, exceeding analysts’ expectations by 4.6%. Still, it was a mixed quarter as it posted a significant miss of analysts’ organic revenue estimates. Interestingly, the stock is up 11.3% since the results and currently trades at $287.04. Read our full analysis of Lincoln Electric’s results here. Playing a significant role in the development of the hydraulic lift truck, Hyster-Yale (NYSE:HY) designs, manufactures, and sells materials handling equipment to various sectors. Hyster-Yale Materials Handling reported revenues of $812.9 million, down 15% year on year. This print surpassed analysts’ expectations by 1%. Overall, it was a very strong quarter as it also logged a beat of analysts’ EPS estimates. Hyster-Yale Materials Handling had the slowest revenue growth of the whole group. The stock is down 1.8% since reporting and currently trades at $34.51. Read our full, actionable report on Hyster-Yale Materials Handling here, it’s free. Established when Max Hillman purchased a franchise operation, Hillman (NASDAQ:HLMN) designs, manufactures, and sells industrial equipment and systems for various sectors. Hillman reported revenues of $442.3 million, up 9.8% year on year. This number topped analysts’ expectations by 1.3%. Overall, it was a very strong quarter as it also put up full-year revenue guidance beating analysts’ expectations and full-year EBITDA guidance beating analysts’ expectations. Hillman had the weakest full-year guidance update in the group. The stock is up 4.6% since reporting and currently trades at $8.70. Read our full, actionable report on Hillman here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. 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Kennametal’s second quarter results were marked by robust year-on-year growth, but the market responded negatively, reflecting lingering concerns despite the headline beats. Management attributed performance to decisive price increases in response to elevated tungsten costs, alongside gains in aerospace, defense, energy, and AI data center end markets. CEO Sanjay Chowbey emphasized that “the combination of expertise, innovation and global operations is a strong competitive advantage for us.” The quarter also benefited from ongoing cost takeout programs, with $27 million in restructuring savings, but free cash flow remained challenged by increased working capital tied to raw material prices. Is now the time to buy KMT? Find out in our full research report (it’s free). Revenue: $736.6 million vs analyst estimates of $726.9 million (42.6% year-on-year growth, 1.3% beat) Adjusted EPS: $2.96 vs analyst estimates of $2.31 (28.4% beat) Revenue Guidance for Q3 CY2026 is $760 million at the midpoint, above analyst estimates of $664.7 million Adjusted EPS guidance for the upcoming financial year 2027 is $4.65 at the midpoint, beating analyst estimates by 22% Operating Margin: 41.1%, up from 6.1% in the same quarter last year Organic Revenue rose 42% year on year (beat) Market Capitalization: $2.30 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Angel Castillo (Morgan Stanley) asked about the normalized earnings run rate post-tungsten benefit. CFO Patrick Watson clarified the adjustment process, stating that current normalized EPS is around $1.64 after removing price/raw material effects, with the first half of the year benefiting more from these tailwinds. Steve Barger (KeyBanc Capital Markets) inquired about material allocation in the Infrastructure segment. CEO Sanjay Chowbey explained the company prioritized allocation for the best returns, but did not face an outright tungsten shortage. Chris Dankert (D.A. Davidson) requested clarification on the price/cost bridge for fiscal 2027. Watson detailed that the $0.39 raw material tailwind would mostly impact the first half, with normal wage inflation and volume effects embedded in the outlook. Stephen Volkmann (Jefferies) probed the implied EBITDA run rate exiting the year, citing mid-teens margin expectations. Watson confirmed the mid-teens target and outlined the transition to normalized earnings as raw material timing effects dissipate. Chris Dankert (D.A. Davidson) asked about the use and materiality of tariff recovery benefits. Chowbey said refund receipts were immaterial, and that any recovered funds would be reinvested into supply chain security and product development. Our analysts will be monitoring (1) the sustainability of price realization as tungsten and other input costs remain elevated, (2) continued market share gains in aerospace, defense, and AI data center infrastructure, and (3) progress on turning free cash flow positive as working capital pressures ease in the second half of the year. Execution on restructuring savings and channel expansion will also be important indicators. Kennametal currently trades at $30.47, down from $36.06 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Wednesday, August 5, 2026 at 9:30 a.m. ET Vice President of Investor Relations - Michael Pici President and Chief Executive Officer - Sanjay Chowbey Vice President and Chief Financial Officer - Patrick Watson Operator: Good morning. I would like to welcome everyone to Kennametal Fourth Quarter and Fiscal 2026 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Michael Pici, Vice President of Investor Relations. Please go ahead, sir. Michael Pici: Thank you, operator. Welcome, everyone, and thank you for joining us to review Kennametal's Fourth Quarter and Fiscal 2026 results. This morning, we issued our earnings press release and posted our presentation slides on our website. We will be referring to that slide deck throughout today's call. I'm Michael Pici, Vice President of Investor Relations. Joining me on the call today are Sanjay Chowbey, President and Chief Executive Officer; and Pat Watson, Vice President and Chief Financial Officer. After Sanjay and Pat's prepared remarks, we will open the line for questions. At this time, I'd like to direct your attention to our forward-looking disclosure statement. Today's discussion contains comments that constitute forward-looking statements and as such, involve a number of assumptions, risks and uncertainties that could cause the company's actual results, performance or achievements to differ materially from those expressed in or implied by such statements. These risk factors and uncertainties are detailed in Kennametal's SEC filings. In addition, we will be discussing non-GAAP financial measures on the call today. Reconciliations to GAAP financial measures that we believe are most directly comparable can be found on the back of the slide deck and on our Form 8-K on our website. And with that, I'll turn the call over to Sanjay. Sanjay Chowbey: Thank you, Mike. Good morning, and thank you for joining us. I will begin the call today with a brief review of the fiscal year, followed by an aerospace product spotlight and some end market commentary supporting our fiscal '27 outlook. Then Pat will cover the quarterly financial results as well as the fiscal '27 outlook. Finally, I'll make summary comments and then open the line for questions. Beginning on Slide 3 for an overview of our strong fiscal year results. Throughout fiscal '26, we continue to win new business and expand our share of wallet with key customers across diverse end markets like aerospace and defense, energy, transportation and earthworks. Our success reflects the strength of our core competencies, which includes material science and process technology, application engineering and a secure global supply chain. This combination of expertise, innovation and global operations is a strong competitive advantage for us. For the last several years, we have used a systematic approach to our growth initiatives, which includes identifying the most attractive opportunities and allocating the resources needed to capitalize on them. An important aspect of this approach is that it is repeatable and sustainable. I will cover an aerospace and defense example of this in a moment. We broadened our growth platforms this year through wins tied to AI-powered data centers, defense programs, mining projects and next-generation vehicle powertrains. At the same time, we also advanced new digital machining solutions that enhance customer productivity. In addition to the growth we saw from our own strategic initiatives, we experienced improvements in several of our end markets. The key external market factors we track all have improved, including IPI, PMI, light vehicle production and aircraft build rates. At the same time, rig counts stabilized during the year. The final component of sales growth is price, driven by higher tungsten costs. Tungsten outside of China has now stabilized but remains at historically high levels. We implemented several pricing actions in response to this environment. As you have heard us say previously, we are committed to offsetting the impact that this additional cost is having on the business. Finally, we realized $27 million in restructuring savings this year and remain committed to $110 million of savings by the end of fiscal '27. Now let's move to our full year results. Full year organic sales increased 19% year-over-year, driven by additional price realization and modest volume. From an end market perspective, for fiscal '26, all end markets experienced growth on a constant currency basis. For the full year, adjusted EPS increased to $4.57 compared to $1.34 in the prior year. Adjusted EBITDA margin was 26.9% compared to 15.2% in the prior year. As expected, free cash flow was adversely impacted by increased working capital requirements directed to tungsten prices. Cash flow from operating activities was negative $4 million and free operating cash flow was negative $79 million. And finally, we returned $71 million to shareholders, $61 million through dividends and $10 million through share repurchases. More details on our full year performance can be found on Slide 18 in the appendix. Pat will provide a detailed overview on the fourth quarter results in his prepared remarks. In summary, we are pleased with the way the team executed this year on growth, lean transformation and cost-out initiatives, while also navigating this unique and unprecedented business environment. Now before I provide an update on end markets, I want to call your attention to Slide 4. This highlights our metal cutting solution to address machining challenges aerospace customers have with carbon fiber reinforced plastics or CFRP. This is one of the most exciting growth stories in our portfolio. CFRP is an extremely strong, rigid and lightweight composite material that is difficult to machine. Due to its high strength to weight ratio, it is widely used in aerospace and automotive manufacturing, where fuel efficiency is a key focus. We are competing in a roughly $500 million market for cutting tools used on carbon fiber composites in aerospace. This market is expected to grow 9% a year through 2028, one of the fastest-growing material groups we serve. Aerospace demand for lightweight composites remains strong. What makes this market especially attractive is the economics. Consumption for diamond coating cutting tools for CFRP is almost double that of cutting tools for aluminum. These can't be easily reconditioned. Once they are consumed, customers come back for a replacement. That provides us a durable recurring revenue base. How we win here is again tied to our core competencies as we are leveraging our engineering and material science expertise. We design innovative solutions using standard and custom tooling with proprietary geometry and material science. This delivered longer tool life and cleaner cuts. We pair that product advantage with deep channel relationships and a well-trained sales and application engineering team. This expands our reach and helps customers solve their manufacturing challenges. Let me give you an example. A customer recently faced a supply disruption from a competitor. So our team quickly stepped in, delivered a superior product and guaranteed supply, and we won that business outright. This is only one example of growth opportunities driving performance in aerospace. Since composites are also used in applications across the transportation and general engineering end markets, we are excited about the prospects of leveraging our expertise to serve this growing application. We will apply the same disciplined, repeatable process I discussed earlier to this growth opportunity. This process helps us identify the most attractive opportunities, move resources quickly and drive growth and share gains, while leveraging our global supply chain to deliver innovative solutions on time and to specification. Turning to Slide 5, I want to frame the end market demand environment supporting our full year fiscal '27 outlook. As a reminder, our full year outlook reflects forecast of specific market drivers and general market conditions. The top half of this slide reflects our sales outlook at the midpoint and includes price, volume and market factors. I will focus on the bottom half of the slide and the market conditions by end market. Aerospace and defense remains a structural growth engine. On the aerospace side, commercial OEM build rates continue to recover as supply chains normalize and production restrictions ease. In defense, we are seeing a proposed increase in the U.S. budget, coupled with NATO members planning to significantly raise spending. This provides a durable multiyear demand trajectory. Aerospace and defense also continues as a strategic growth initiatives for us. You might remember at our last Investor Day, we talked about shifting resources from transportation to aerospace and defense in the Americas to grow our position in that market. That helped us drive share gains and new opportunities like the one I mentioned a few minutes ago. Coupled with key wins on various defense opportunities, aerospace and defense is now projected to be our third largest end market. General engineering is stable. U.S. and European industrial production are both forecast up low single digits, and China has returned to modest expansion. Energy growth is anticipated to be strong. The U.S. land-based rig count has turned decisively. Prior estimates were a mid-single-digit decline. Projections now forecast rig counts up high single digits. Customer sentiment has moved from cautious to improving and combined with increased rig counts supports a meaningful upward revision to this end market assumption. The trend in the market for AI data center power generation continues to experience rapid expansion, which provides further support for growth in this end market. Now there are some offsets we are monitoring. Transportation continues to be soft. Global light vehicle production moved from up about 1 point in fiscal '26 to down about 1 point in fiscal '27, mainly in the Americas and Europe. In earthworks, mining share gains are partially offset by soft coal markets in the U.S. and China, though customers, they are increasingly consolidating towards reliable suppliers like us. And in road construction, we are assuming that normal seasonality and competitive pressures continue. Netting it out, our fiscal '27 sales assumptions in constant currency and including price reflect broad-based growth across most end markets. We are confident that this market recovery is broad enough and the pricing environment firm enough to support our outlook and growth trajectory into fiscal '27. Now let me turn the call over to Pat, who will review the fourth quarter financial performance. Patrick Watson: Thank you, Sanjay, and good morning, everyone. I will begin on Slide 6 with a review of our fourth quarter operating results. Q4 was the fourth consecutive quarter of organic sales growth with an organic sales increase of 42%. Our results for the quarter reflect strong price realization from our decisive pricing actions driven by the unprecedented rise in tungsten costs and continued volume improvements in metal cutting. At the segment level, sales increased organically 22% in metal cutting and 74% in infrastructure. On a constant currency basis, Americas sales increased 60%, Asia Pacific increased 28% and EMEA increased 24%. We experienced growth in all our end markets on a constant currency basis. Energy increased 101% Earthworks 76%; Aerospace and Defense, 43%; General Engineering, 28%; and Transportation, 7%. I will provide more color when I review the segment results in a moment. We achieved record adjusted EBITDA and operating margins of 46.8% and 41.5%, respectively, versus 14.8% and 7.4% in the prior year quarter. The margin increase was driven by favorable timing of raw material pricing compared to costs of $252 million, non-raw material-related pricing and tariff surcharges in Metal Cutting, higher sales and production volumes and incremental year-over-year restructuring savings of approximately $5 million. These were partially offset by higher compensation costs tariffs and general inflation. Adjusted earnings per share was $2.96 in the quarter, a record high for the company versus $0.34 in the prior year period. The main drivers of our EPS performance are highlighted on the bridge on Slide 7. The year-over-year effect of operations this quarter was $2.55. This reflects approximately $2.43 of favorable timing of raw material pricing compared to costs, non-raw material-related pricing and tariff surcharges in Metal Cutting, higher sales and production volume and incremental restructuring benefits of $0.05 per share. These were partially offset by higher compensation costs, tariffs and general inflation. A lower effective tax rate contributed a $0.09 benefit in the quarter, driven by geographic mix. The headwind of $0.07 in other is mainly driven by higher share count and slightly higher interest expense. You can also see $0.04 of transaction gains related to preferential Bolivia exchange rates. Currency and pension effects offset each other, and there is a $0.01 gain from the Inflation Reduction Act tax credit. Slides 8 and 9 detail the performance of our segments this quarter. Metal Cutting sales grew 22% organically and 24% on a reported basis. We outperformed the public peers again this quarter. That marks the fourth quarter in a row and extends a favorable trend that started 4 years ago. Regionally, on a constant currency basis, the Americas increased 29%, Asia Pacific increased 20% and EMEA increased 16%. Looking at sales by end market on a constant currency basis, Energy increased 36% this quarter. The growth was driven by price and continued AI data center project wins. Aerospace and Defense grew 35% year-over-year as we capitalize on higher build rates and accelerate share of wallet gains in tier suppliers in the Americas and EMEA. General Engineering grew 25% year-over-year, driven by higher price realization and share gains in the indirect channel. For an example, in the Americas, we leveraged our strategic partnership with a large national distributor to expand our reach. And lastly, Transportation increased 7% year-over-year as higher price was partially offset by prior year project wins in Asia Pacific, including EV-related program activity. Metal Cutting adjusted operating margin was 27.3% compared to 7.9% in the prior year, driven by favorable timing of raw material-related pricing compared to cost of $54 million. non-raw material pricing and tariff surcharges, higher sales and production volume and restructuring savings of $4 million, partially offset by higher compensation costs and general inflation. Turning to Slide 9 for Infrastructure. Organic sales grew by 74% year-over-year with favorable foreign exchange of 1% and a favorable business day effect of 1%, partially offset by a divestiture effect of 3%. Regionally, on a constant currency basis, sales in the Americas increased 103%, EMEA grew 46% and Asia Pacific grew 40%. Looking at sales by end market on a constant currency basis, Energy grew 135%, mainly driven by price in the Americas, partially offset by volume as we prioritized other end markets. Earthworks grew 76%, driven by price and higher volume in surface mining and construction from share gains due to availability of materials. Aerospace and Defense grew 63%, driven by price and continued execution of our strategic initiatives in the Americas and EMEA. And lastly, General Engineering grew 37% from price and volume growth in EMEA, partially offset by volume prioritization in the Americas. Adjusted operating margin increased to 58.4% compared to 6.8%, primarily due to favorable timing of raw material pricing compared to cost of $198 million, partially offset by lower sales and production volume, higher compensation costs and general inflation. Now turning to Slide 10 to review our free operating cash flow and balance sheet. Free operating cash flow as a percent of adjusted net income was modestly better than we anticipated. Our full year free operating cash flow was negative $79 million compared to positive $121 million reported in the prior year. The change in free operating cash flow was primarily the result of increased working capital required by higher tungsten prices. Net capital expenditures were $75 million compared to $87 million in the prior year. In total, we returned $71 million to shareholders, $61 million through dividends and $10 million from share repurchases. Our share repurchase program remained positive this quarter as a result of the higher tungsten pricing and corresponding working capital needs. During the quarter, we took actions to enhance liquidity, extend debt maturities to position the company to capture near-term growth opportunities. These actions provide additional liquidity to support near-term tungsten-related working capital needs and preserve financial flexibility to respond to future market developments, while maintaining balance sheet discipline. At quarter end, we had combined cash and revolver availability of approximately $926 million, which includes the additional $200 million available by exercising the accordion feature on our revolver, and we are well within our financial covenants. Additionally, we had full availability of our new $500 million term loan. As is customary, this facility is a use it or lose it proposition. So we intend to fully draw the new term loan during the September quarter and pay down any revolver borrowings. Going forward, the term loan can be paid down within the 3-year term, which gives us the flexibility to scale down the balance sheet if working capital needs decline. With the refinancing of the 2028 notes, the remaining $91 million of outstanding notes were redeemed on July 1, we have meaningfully extended our debt maturity profile. Our nearest debt maturity is July 2029, and our public notes maturities are now extended to 2031 and 2036, respectively. The full balance sheet can be found on Slide 22 in the appendix. Turning to Slide 11 regarding our full year outlook. We are providing a range for both the full year and the first quarter, beginning with the full year. We expect FY '27 sales to be between $3.33 billion and $3.45 billion, with volume ranging from 1% to 4%, price and tariff surcharges ranging from approximately 40% to 43% and a neutral effect from foreign exchange. We have been successful and remain committed to achieving price. As Sanjay noted earlier in his remarks, most end market indicators maintained positive momentum into FY '27. At the midpoint at constant currency and including price, we expect all end markets to increase high double digits year-over-year. Our annual outlook also assumes that tungsten will remain stable at the current level. Additionally, we are assuming that there is no material effect on customer activity as a result of the conflict in the Middle East. Approximately $10 million of rollover savings from our previously announced restructuring initiative has been included. We expect interest expense of approximately $50 million due to the additional borrowings to fund working capital requirements and an effective tax rate of approximately 25%. We expect adjusted EPS in the range of $4.15 to $5.15. On the cash side, the full year outlook for working capital expenditures is $85 million and the outlook for primary working capital is 45% by fiscal year-end. Taken together, we expect free operating cash flow to be approximately 20% of adjusted net income, reflecting the working capital pressure from the rising cost of tungsten. The bridge on Slide 12 highlights the main drivers impacting EPS at the midpoint of our outlook. The bridge walks you from our FY '26 adjusted EPS of $4.57 to the midpoint of our FY '27 outlook of $4.65, pretty flat on the surface. Underneath that roughly flat headline number, the core earnings engine of the business continues to strengthen. There's a lot going on underneath, so let me unpack it. Starting with the tailwinds. First, operations adds about $0.53. Favorability of raw material pricing compared to costs is positive $0.39 for the full year with favorability occurring in the first half of the year, most significantly in the first quarter. Higher sales and production volume as end markets continue to improve and we execute on the share gain initiatives, together with lower incentive compensation of approximately $0.18 and about $0.10 of restructuring savings, partially offset by higher raw material costs as tungsten remains at elevated levels and higher wages and general inflation. We also expect a $0.17 benefit from the IRA advanced manufacturing credit. Now to the headwinds. Year-over-year, we will see a 23% Bolivia FX headwind as the Bolivian government has ended the preferential program. Higher interest expense is a $0.25 drag, reflecting our higher debt levels following the recent financing actions and other items of about $0.08, primarily a higher share count of $0.07. Taxes and pension are $0.04 and $0.02, respectively. Netted all together, and we arrive at an FY '27 midpoint of $4.65. The key takeaway is that our operational momentum, price realization, volume and cost discipline is essentially offsetting a set of largely nonoperational headwinds related to FX, interest and a higher tax rate. The FY '27 midpoint reflects a $0.39 EPS price raw tungsten impact as compared to $3.11 in the prior year. Our first quarter outlook can be found on Slide 13. We expect Q1 sales to be between $745 million and $775 million, with volume ranging from 1% to 4%, price and tariff surcharges in the range of 50% to 53% and neutral foreign exchange. Let me share some details on the sales assumptions affecting the Q1 outlook. Once again, similar to the full year impact, the combination of improving end market conditions, focus on share gain initiatives and price, we anticipate each end market to be up high double digits on a constant currency basis. Foreign exchange is neutral on both the sales and operating income basis. Interest expense is assumed to be approximately $11 million and an effective tax rate of approximately 25%. We expect adjusted EPS in the range of $2.50 to $2.80, which includes approximately $2.25 of favorable timing of raw material pricing compared to costs. Finally, as we discussed on our last call, I'll provide you some assumptions to help you model a FY '28 and beyond view of the business if tungsten were to remain at this elevated level. First, some context on the FY '27 quarterly cadence. We have provided the impact for Q1 and the full year effect of tungsten on the business. The FY '27 price raw benefit will be materially behind us by the beginning of the third quarter as we expect tungsten pricing and costing will be on the same level in the second half. The working capital build will follow the same pattern, and we expect free operating cash flow to turn positive in the second half. Assuming tungsten remains stable at the current level, we expect Q4 EBITDA margins in the mid-teens, which represents a clean quarter to use as a jump-off point to model FY '28 and beyond. In the current high price tungsten environment, we expect volume leverage to be in the mid-30s. This volume leverage estimate reflects the substantially higher raw material costs in the business as well as a sales mix that is more heavily weighted toward the infrastructure business. We remain committed to executing share gain initiatives to drive above-market growth, continuous improvement actions to enhance our margins and evaluating opportunities to optimize our portfolio. And with that, I'll turn it back over to Sanjay. Sanjay Chowbey: Thank you, Pat. Turning to Slide 14. Let me take a moment to summarize. We delivered a solid fiscal '26, driven by price and modest improvements in our end markets, project wins on the commercial side and cost improvement actions. We continue to make steady progress on our strategic growth initiatives, lean transformation and structural cost improvement, while also exploring ways to strengthen our portfolio over time. We are well positioned to continue to deliver on our commitments in fiscal '27 and remain confident in our plan for long-term value creation for our shareholders. And with that, operator, please open the line for questions. Operator: [Operator Instructions] And our first question today will come from Angel Castillo with Morgan Stanley. Angel Castillo Malpica: Congrats on a strong quarter. I would just love to go back to the normalized and the bridge that you provided. I guess you gave a lot of good color on the slides, but can you just help me reconcile a couple of things. If I just take the $0.39 EPS from raw material timing for fiscal year '27 and then also layering in the $3.11 that I think you had in the fiscal year '26 guide, it implies an underlying kind of normalized of $1.15, if I just kind of leave everything else unchanged. So just it seems like there's a number of puts and takes, but as I kind of look at the normalized earnings, I used to think about it as closer to $1.60. So has anything changed in terms of what you view as kind of the underlying kind of normalized run rate of the earnings bridge for this -- for the business? And as you think about that exit rate of fiscal year '27, just help us kind of level set what am I missing or what has changed? Patrick Watson: No, I think, Angel, there's 2 things to consider, right? And let's go back to a simple view of, let's say, FY '26, right? And so when we talked a quarter ago, we talked about a midpoint of $3.88 and price raw effect in the year of about $2.45 and about $0.20 tailwind going into '27 from a comp perspective, and that kind of gets you a clean FY '26 of $1.63, right? I would say if you think about those numbers in the context now of what actually happened in the fourth quarter, EPS came in a bit higher, $4.57, really driven by a little bit of pricing, a little bit of raw material. That's why that price raw number went from $2.45 to $3.11, right? And then that comp number came in a little bit tighter. And so that's an $0.18 tailwind going into FY '27, so $1.64. So $1.63 in terms of what we thought that number was 90 days ago, $1.64 kind of in the world we're living in now. I think as well, as you think about what's happening in the context of FY '27, yes, you have $0.39 for the full year, right? But I think you got to figure into that, that the first half of that -- of the year is going to be positive, right? And as we talked about in the prepared remarks, in the third -- beginning of the third quarter, that price raw tailwind is going to be substantially behind us at that point in time. And so the benefit that we saw in FY '26, the $0.39 in Q3, the $2.43 in Q4 goes away, okay? And so you just have these fundamental 2 halves, where you're going to have strong price raw in the first half. And then on a year-over-year basis, it's going to be a headwind for us. Angel Castillo Malpica: So just maybe kind of putting all that together, the dots together, you had the $1.63 was before. What would you kind of consider now your normalized Patrick Watson: In terms of last year for FY '26, $1.64. Angel Castillo Malpica: No, for fiscal year '27 I -- kind of all that stuff. Patrick Watson: From a fiscal year '27 perspective, then you just -- you simply need to take back out the full amount of tungsten, right, from a FY '26 perspective, $2.43 plus the $0.39. Angel Castillo Malpica: And then just maybe as a second question here, just in terms of the organic growth, could you just help us understand for the fiscal or 4Q, was volume for the total company up? Or was there a little bit of a drag when you kind of put all the pieces together? And then just curious, you talked about acceleration or good kind of improvements in some of the end markets here. Just curious how your kind of order trends right now are shaping up versus that 1% to 4% volume growth outlook? Patrick Watson: Yes, certainly. So as we think about across the business, I'd say the business in total, low single digits from a volume perspective, a little bit different in terms of what's going on between the 2 businesses. Metal Cutting, a bit higher, mid-single-digit volume performance in Q4. Infrastructure, as we talked about, was volumetrically more flat. And there's -- inside of Infrastructure there, we did make some choices around portfolio in terms of customers we serve and how we're utilizing our material to drive ultimately the best return on the tungsten we have. Sanjay, do you want to add anything to that from a market perspective? Sanjay Chowbey: Yes. Angel, I'm just going to add to your second part of the question. Of course, as you know, that we have had 3 years of slow burn industrial production being soft. So '26 was the first year, where we saw mid-single digit, low single-digit type of numbers throughout the year. And then now as we are looking at it, we do expect the low single digit at the midpoint, we have given you 2.5% volume for fiscal '27. So that is definitely a positive news because that's going to build upon the base that we have in fiscal '26. And I will give you more color here at the -- by segment level. Aerospace and defense will be the strongest of that. The next will be energy. And following that will be general engineering, where we continue to see improvement in IPI across the board. And then you come into earthworks, which is flattish and transportation being the one that is negative slightly. Operator: And our next question will come from Steve Barger with KeyBanc Capital Markets. Steve Barger: In Infrastructure, you took share in earthworks due to availability of materials. You just talked about that. But you also -- when you're prioritizing volume in energy and general engineering, does that mean on the whole, you were short material and lost potential sales due to the prioritization? Sanjay Chowbey: No, Steve. We are not short. What we're saying is that if as we see the growth in overall volume, including in aerospace and defense and the areas, where we do consume a lot more tungsten, we did prioritize what will drive the best return for our shareholders and how we get the best return on tungsten that we have. There was no shortage, but we were definitely allocating what we have. While there was no shortage, let's just say that even if we mentioned even supply, which we did secure, we were allocating based on where we can get the best return. Steve Barger: But I mean, so you have enough material for everybody, but you didn't sell to everybody because you want to drive those returns. Sanjay Chowbey: Yes. I think as you might have heard from even others that we could actually take more business if we can go get a lot more tungsten material. But there's no -- that doesn't mean that we have shortage. We are managing our overall supply chain and processing capacity because remember, it's not just about the ore. In our business, processing capacity is also one of the competitive advantage, which we do have. So that's where we have to manage how we allocate that capacity also. Steve Barger: Okay. Well, when I look at the 1% to 4% volume guidance for FY '27 in the context of the cycle inflection, how much of that is what the market is giving you? And how much is share gain would you estimate? Sanjay Chowbey: Yes. We are not breaking it down specifically, but I can tell you that it will be coming from both. As we have said before that above-market growth, 100 basis points to 200 basis points is our target. But whatever market does, we want to definitely do 100 basis points to 200 basis points better than market. So that gives you a rough idea. That's where we will be in terms of breakdown between market versus the strategic growth or so-called our own initiatives. Steve Barger: So just to clarify, I mean, if the market is up 1% or 2% and your guidance is 1% to 4%, your outgrowth should account for basically all of that. Sanjay Chowbey: No. So let me go -- sorry, go ahead, finish your question. Steve Barger: No, no, I was just trying to break apart what you consider outgrowth versus share gain. Sanjay Chowbey: Yes. So if you look at the overall volume growth that we have said, 1% to 4% in that share gain will be 1% to 2%. rest is market. Operator: And our next question will come from Chris Dankert with D.A. Davidson. Christopher Dankert: I guess, apologies, a quick just clarification. I got a little bit lost on the explanation on price cost for fiscal '27 specifically. So again, if we take the $3.11 from this year and the $0.39 of raw material timing that we're benefiting from in '27, back that out, I'm coming to kind of a core ex price cost of about $1.15, is that right? And if not, could you just -- one more time run me through that, apologies. Patrick Watson: I think -- yes, Chris, I think you've got to take in the other factors that are in play there as you build it up, right? And so clearly, in terms of -- versus the prior year, and if you're bridging it all the way back, you've got the Bolivia FX, you got to take out of there, too, right, since the Bolivian government ended that preferential exchange rate program here this quarter, right? And so when I think about that price raw, certainly, we've got the $0.39 going on here in FY '27, right? We've got the $3.11 going on from the prior year. That's the double stack, so to speak, right, if you pull all of that out. Christopher Dankert: And then I haven't seen anything in the presentation, was there any IEEPA benefit anywhere in the numbers here? Do we expect any benefit? Maybe just stake out anything around the tariff recovery. Sanjay Chowbey: Yes, Chris, we have applied for refunds, and we have received some, but it was immaterial to report. We continue to apply. Our overall plan at this point is that we will reinvest that to strengthen our overall supply chain security, supply network optimization and also product and service development to serve our customers better. But I would like to take the opportunity also to tell you that as you look at this situation that we were dealing with over the last 1.5 years, initially, we did incur some cost and then we implemented surcharges, but that was not our first action. First thing we did is to make sure that we have production moves. We moved several thousand parts around the world. We did supply chain network optimization, and then we passed along some of the surcharges. Of course, even with the new policies in place, tariffs are more or less in the similar zone. So that's how we are looking at it, and we're managing it in an overall sense, and we'll continue to monitor and take appropriate actions. Operator: And our next question will come from Steve Volkmann with Jefferies. Stephen Volkmann: Pat, thank you for the sort of cadence through '27. Obviously, the key and at least in my humble opinion, is sort of when we get back to kind of the core earnings of the company. So you talked about, I think, mid-teens EBITDA margin as sort of the 4Q exit rate for '27. I just want to make sure I had that right. And then okay, good. All right. So 2 questions about that. One is, I guess, we sort of give up the timing arbitrage on the raws here, obviously. But revenue will sort of stay in the ZIP code it's in, I guess, assuming that tungsten stays where it is. So as I just do the sort of the dumb math, it feels like you're talking about kind of a $600 million-ish in EBITDA run rate to exit -- annual run rate to exit 4Q, mid-teens margin on $3-ish billion of sales. Is that the right way to think about the annualized way to do that? Sorry if this is confusing. Patrick Watson: Yes. I guess the way I would think about that, Steve, and so let's think about this from the standpoint of FY '27 from an overall outlook perspective, you've got basically that they're, let's call it, $3.4 billion roughly, okay? You think about that and you take that now forward a year, right, in a flat tungsten environment, that's the number you're going to kind of iterate off of small amount of incremental price, whatever you think the incremental volume is, right? That's kind of where I would take that forward. From an EBITDA perspective, yes, that fourth quarter, mid-teens EBITDA, right, that we expect based on what we know today, that's going to be a clean price raw quarter, right? And so then you can apply, say, normal seasonality of the business then going forward to really generate what that FY '28 EBITDA profile would be. Stephen Volkmann: And then switching to the free cash flow. Just you mentioned that, that turns positive, I think, in the second half of FY '27. Is this a situation where we're going to get like 150% or 200% free cash flow at some point and kind of recapture this? Or does it just kind of slowly go back to something higher than 20%? Patrick Watson: Yes. I would say when you think about this year and then how we've talked about what's going on from a price raw perspective, talking about cash flow effectively being the mirror image of that, right? And so when I think about how cash flow is going to develop this year, Q1 is going to be a sizable cash draw. And to put a fine point on that, probably in terms of just dollars around $200 million. And I would expect that, that's going to basically be, call it, the high watermark, right, for the cash draw here. And then in Q2, that would step down a little bit, right? And then in Q3, expectation is that now inflects positive, right? And that's more or less matching up with what's happening on the income statement on the price raw benefit, okay? It's just, again, somewhat the mirror image of that. And that's really driven by inventory valuation, right? And so obviously, you've seen there's a significant step-up here in inventory in the fourth quarter, anticipating another sizable inventory build here on valuation in Q3 and inventory will basically hit its peak for us here in the second quarter. [ Now we get into the ] back half of the year, back half of the year should have good positive cash flow to it. Stephen Volkmann: And is FY '28 like way above $100 million or just directionally? Patrick Watson: I would simply say with respect to FY '28 and kind of beyond, we would get -- we would return to a normalized cash generation profile. Again assuming, it comes [indiscernible]. Operator: [Operator Instructions] And our next question will be a follow-up from Chris Dankert with D.A. Davidson. Christopher Dankert: Hoping you can help me out on one other aspect of the fiscal '27 guide. So if I look at the operations bucket, we're looking at $0.53 for the year. If I back out the things you flagged there, the raw materials, lower incentive comp, restructuring, I'm kind of left with a core volume wage inflation number looks like a negative $0.15, $0.18, whatever EPS impact. So like how are we getting negative contribution on kind of the core volume? And just again, apologies if I'm misinterpreting that. Patrick Watson: Yes. The way I look at that in terms of what's sitting in there, right, you got the $0.53. You got -- obviously, you got favorability in the raw material timing of $0.39. You've got the favorability on the comp coming in as well, right? You should have some favorability coming through, obviously, on the restructuring. We're going to have a little bit of, I'll just call it, the normal wage inflation and things like that, that are going on in the course of the business. And again, this is obviously at the midpoint as well, right? When you think about this over the context of the outlook, the outlook has some variability built to price into it as well, just again, given the sheer amount of tungsten going through the business today and how much price we're going after. Operator: And this will conclude our question-and-answer session. I'd like to turn the conference back over to Sanjay Chowbey for any closing remarks. Sanjay Chowbey: Thank you, operator, and thank you, everyone, for joining the call today. As always, we appreciate your interest and support. Please don't hesitate to reach out to Mike if you have any questions. Have a great day. Operator: A replay of this event will be available approximately 1 hour after its conclusion. To access the replay, you may dial toll-free within the United States at (855) 669-9658. Outside of the United States, you may dial (412) 317-0088. You will be prompted to enter your conference ID 2709076 then the pound or hash symbol. You will be asked to record your name and company. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time. Before you buy stock in Kennametal, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Kennametal wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. 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Interested in Kennametal Inc.? Here are five stocks we like better. Kennametal delivered record fiscal fourth-quarter results: Organic sales rose 42%, adjusted EPS reached $2.96 versus $0.34 a year earlier, and adjusted EBITDA margin expanded to 46.8%, driven largely by pricing, tariff surcharges, higher volumes and favorable tungsten-cost timing. For fiscal 2026, organic sales increased 19% and adjusted EPS climbed to $4.57 from $1.34, with growth supported by aerospace and defense, energy, mining, AI data-center projects and other industrial applications. Fiscal 2027 guidance calls for sales of $3.33 billion–$3.45 billion and adjusted EPS of $4.15–$5.15. Management expects favorable raw-material timing to boost first-half results but anticipates positive free cash flow only in the second half as tungsten-related working-capital pressures ease. Kennametal (NYSE:KMT) reported sharply higher fourth-quarter and fiscal 2026 earnings, citing pricing actions tied to elevated tungsten costs, modest volume improvement, restructuring savings and stronger conditions in several industrial end markets. For fiscal 2026, organic sales rose 19% year over year, while adjusted earnings per share increased to $4.57 from $1.34 in the prior year. Adjusted EBITDA margin expanded to 26.9% from 15.2%. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling President and Chief Executive Officer Sanjay Chowbey said the company won new business and expanded customer relationships across aerospace and defense, energy, transportation and earthworks. He also pointed to project wins connected to AI-powered data centers, defense programs, mining and next-generation vehicle powertrains. Fourth-quarter organic sales increased 42%, marking the company’s fourth consecutive quarter of organic growth. Adjusted EBITDA margin reached a record 46.8%, compared with 14.8% in the prior-year quarter, while adjusted operating margin rose to 41.5% from 7.4%. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Adjusted earnings per share was a record $2.96, compared with $0.34 a year earlier. Chief Financial Officer Pat Watson said results reflected strong price realization, including pricing actions and tariff surcharges, as well as continued volume improvement in the Metal Cutting business. Watson said favorable timing between raw-material pricing and costs was a major contributor to the quarter’s margin and earnings performance. The company cited $252 million of favorable timing, along with non-raw-material pricing, tariff surcharges, higher sales and production volumes, and about $5 million in incremental restructuring savings. Those factors were partly offset by higher compensation costs, tariffs and general inflation. → No Hangover: Revisiting Microsoft One Week After Earnings At the segment level, Metal Cutting organic sales increased 22%, while Infrastructure organic sales grew 74%. Metal Cutting adjusted operating margin rose to 27.3% from 7.9%, and Infrastructure adjusted operating margin increased to 58.4% from 6.8%. Energy sales increased 101% on a constant-currency basis in the quarter. Earthworks sales rose 76%. Aerospace and defense sales increased 43%. General engineering sales grew 28%. Transportation sales increased 7%. Management said total company volume grew at a low-single-digit rate during the quarter. Metal Cutting delivered mid-single-digit volume growth, while Infrastructure volume was approximately flat as the company prioritized customers and applications expected to generate the best returns on available tungsten and processing capacity. Chowbey described aerospace and defense as a structural growth engine, supported by recovering commercial aircraft production rates, easing supply-chain restrictions and projected increases in U.S. and NATO defense spending. He said aerospace and defense is now expected to become Kennametal’s third-largest end market. The company highlighted cutting tools used to machine carbon fiber reinforced plastics, or CFRP, in aerospace. Chowbey said Kennametal competes in an approximately $500 million aerospace cutting-tool market for carbon-fiber composites that is expected to grow 9% annually through 2028. He said diamond-coated tools used for CFRP have recurring-revenue characteristics because they cannot be easily reconditioned and must be replaced after use. Management also expects energy-market growth to strengthen. Chowbey said projections for U.S. land-based rig counts have shifted from a previously expected mid-single-digit decline to high-single-digit growth. The company also cited continued expansion in AI data-center power generation as support for energy demand. Offsets include softer transportation conditions, with global light-vehicle production expected to decline by about 1% in fiscal 2027, primarily in the Americas and Europe. In earthworks, mining share gains are expected to be partly offset by softer coal markets in the U.S. and China. Kennametal forecast fiscal 2027 sales of $3.33 billion to $3.45 billion, including volume growth of 1% to 4% and pricing plus tariff surcharges of approximately 40% to 43%. Foreign exchange is expected to have a neutral effect on sales. The company expects adjusted fiscal 2027 earnings per share of $4.15 to $5.15, with a midpoint of $4.65. The outlook assumes tungsten prices remain stable at current levels and that the Middle East conflict does not materially affect customer activity. Watson said the full-year outlook includes about $0.39 per share of favorable raw-material pricing timing, concentrated in the first half and particularly in the first quarter. By the second half, the company expects tungsten pricing and costing to align more closely, reducing the benefit from timing. For the fiscal first quarter, Kennametal expects sales of $745 million to $775 million and adjusted earnings per share of $2.50 to $2.80. That quarterly earnings outlook includes approximately $2.25 per share of favorable timing between raw-material pricing and costs. Free operating cash flow was negative $79 million in fiscal 2026, compared with positive $121 million in the prior year, primarily because higher tungsten costs increased working-capital requirements. The company expects fiscal 2027 free operating cash flow to equal approximately 20% of adjusted net income, with positive free cash flow anticipated in the second half of the year. At quarter-end, Kennametal had approximately $926 million of combined cash and revolver availability, including potential availability under an accordion feature. The company also had full availability under a new $500 million term loan and said it intends to draw the facility during the September quarter and use proceeds to reduce revolver borrowings. Kennametal Inc is a global industrial technology company that designs and manufactures advanced materials, tooling systems, and engineered components for a range of demanding applications. Its solutions support precision metalworking, earthmoving, and wear-resistant environments, catering to customers seeking enhanced productivity, longer tool life, and reduced operating costs. The company's product portfolio spans indexable cutting tools, solid round tools, tool holders, metalworking fluid systems, wear parts, ceramics and composites, and custom-engineered components. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Kennametal Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Kennametal Inc. KMT reported adjusted earnings of $2.96 per share for the fourth quarter of fiscal 2026, up 770.6% year over year. The bottom line beat the Zacks Consensus Estimate of $2.31 by 28.1%.Sales rose 42.7% year over year to $736.6 million and surpassed the consensus estimate of $720 million by 2.3%. Reported sales growth reflected a 42% organic increase, a 1% favorable foreign-currency impact and a 1% benefit from business days, partly offset by a 1% divestiture drag. The Americas led constant-currency regional growth at 60%, followed by Asia Pacific at 28% and EMEA at 24%.Energy sales jumped 101% in constant currency, while Earthworks advanced 76%. Aerospace & Defense rose 43%, General Engineering increased 28% and Transportation grew 7%. Management cited higher pricing, strategic wins and better market activity across several end markets. Kennametal Inc. price-consensus-eps-surprise-chart | Kennametal Inc. Quote In the fiscal fourth quarter, Kennametal’s cost of goods sold decreased 18.3% year over year to $303.1 million. Operating expenses were $125.6 million, up 18.6% year over year.Adjusted operating income was $305.7 million, translating into a 41.5% margin, compared with $38.2 million and 7.4% a year earlier. Adjusted EBITDA reached $345 million, with the margin expanding to 46.8% from 14.8%.The improvement was driven mainly by about $252 million of favorable timing between raw material-related pricing and costs. Non-raw-material pricing, tariff surcharges, higher sales and production volumes and $5 million of restructuring savings also helped. Compensation costs, tariffs and inflation were offsets. Metal Cutting revenues increased 24% year over year to $397.8 million. Organic sales rose 22%, supported by a 1% currency benefit and a 1% business-days contribution. Constant-currency sales climbed 29% in the Americas, 20% in Asia Pacific and 16% in EMEA.Adjusted operating income totaled $108.4 million and adjusted operating margin expanded to 27.3% from 7.9%. Results benefited from roughly $54 million of favorable raw-material pricing timing, non-raw-material pricing, tariff surcharges, higher volume and $4 million of restructuring savings. Infrastructure revenues rose 73% to $338.8 million, while organic sales increased 74%. A 1% currency benefit and a 1% business-days benefit were partly offset by a 3% divestiture impact. Constant-currency growth reached 103% in the Americas, 46% in EMEA and 40% in Asia Pacific.Adjusted operating income was $197.9 million, with adjusted margin surging to 58.4% from 6.8%. About $198 million of favorable raw-material pricing timing drove the gain, partly offset by lower volume of sales and production, an increase in compensation costs and general inflation. Fiscal 2026 cash used in operating activities was $4.0 million against $208.3 million generated in the prior year. Free operating cash flow was negative $79.1 million against positive $121.2 million, reflecting higher working capital needs tied to tungsten-driven inventory values and supplier advances.Kennametal ended fiscal 2026 with $95.8 million in cash and cash equivalents, down from $140.5 million a year earlier. Inventories increased to $1.11 billion from $538.2 million, while long-term debt rose to $685.3 million from $596.8 million. The company paid $60.8 million in dividends during the year. For the first quarter of fiscal 2027, KMT expects sales of $745-$775 million and adjusted earnings of $2.50-$2.80 per share. The outlook assumes 1-4% volume growth, 50-53% price and tariff-surcharge realization and a neutral foreign-exchange impact.For fiscal 2027, sales are projected at $3.33-$3.45 billion, with adjusted earnings of $4.15-$5.15 per share. Management expects free operating cash flow of about 20% of adjusted net income and capital spending near $85 million. Share repurchases will remain on hold until cash flow becomes positive. The company currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks from the same space are discussed below:Applied Industrial Technologies AIT carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Applied Industrial’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 4.0%.  In the past 60 days, the Zacks Consensus Estimate for Applied Industrial’s fiscal 2026 bottom line has inched up 0.1%.IDEX Corporation IEX presently carries a Zacks Rank of 2. IDEX’s earnings surpassed the consensus estimate in each of the trailing four quarters. The average earnings surprise was 7.7%. In the past 60 days, the Zacks Consensus Estimate for IEX’s 2026 earnings has increased 1.4%.The Middleby Corporation MIDD currently carries a Zacks Rank of 2. Middleby’s earnings topped the consensus estimate in each of the trailing four quarters. The average earnings surprise was 10.4%. In the past 60 days, the Zacks Consensus Estimate for MIDD’s 2026 earnings has increased 0.3%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Kennametal Inc. (KMT) : Free Stock Analysis Report Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report IDEX Corporation (IEX) : Free Stock Analysis Report The Middleby Corporation (MIDD) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Kennametal (NYSE:KMT) shares jumped more than 12% in pre-market trading after the industrial technology company reported fourth-quarter results that comfortably exceeded Wall Street expectations and issued guidance well above analyst forecasts. The company posted adjusted earnings of $2.96 per share, beating the consensus estimate of $2.32. Revenue reached $736.6 million, ahead of analyst expectations of $723.3 million. Quarterly revenue increased 43% from the same period last year, rising from $516.4 million, with 42% organic sales growth driving the improvement. President and Chief Executive Officer Sanjay Chowbey said stronger market conditions and the company’s strategic initiatives supported the robust performance. “Our team delivered strong fiscal 2026 results, reflecting volume from improving market conditions and our strategic growth initiatives,” Chowbey said. “We achieved record adjusted EPS this quarter through decisive pricing actions in an unprecedented tungsten environment, volume growth and cost improvement efforts.” Kennametal issued first-quarter fiscal 2027 guidance that significantly exceeded Wall Street forecasts. The company expects adjusted earnings per share of between $2.50 and $2.80, compared with the analyst consensus estimate of $1.62. The midpoint of the guidance, $2.65 per share, is approximately 64% above market expectations. Revenue for the first quarter is forecast to range between $745 million and $775 million. The midpoint of $760 million compares favourably with the consensus estimate of $667.5 million. Management also introduced an optimistic outlook for fiscal 2027. Kennametal expects full-year adjusted earnings per share of between $4.15 and $5.15, with the midpoint of $4.65 exceeding the analyst consensus forecast of $3.90. The company projects annual revenue of between $3.33 billion and $3.45 billion. The midpoint of $3.39 billion is well above the market expectation of $2.34 billion. Adjusted operating income for the fourth quarter increased to $305.7 million, representing an operating margin of 41.5%, compared with $38.2 million and a 7.4% margin in the same quarter last year. The improvement was driven by favourable pricing linked to higher raw material costs, additional pricing and tariff surcharges within the Metal Cutting business, stronger sales volumes and approximately $5 million in restructuring savings. For the full fiscal year 2026, Kennametal reported adjusted earnings of $4.57 per share, up from $1.34 in the previous financial year. Kennametal stock price

This article first appeared on GuruFocus. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Kennametal Inc (NYSE:KMT) delivered a strong fiscal 2026, with full-year organic sales up 19% and record adjusted EBITDA margins of 26.9%, driven by price realization and volume improvements. The company is capitalizing on high-growth opportunities, particularly in aerospace and defense, with a new focus on the $500 million market for cutting tools used on carbon fiber reinforced plastics (CFRP), which is expected to grow 9% annually through 2028. Kennametal Inc (NYSE:KMT) continues to outperform public peers in its metal cutting segment, marking the fourth consecutive quarter of outgrowth and extending a favorable trend that started four years ago. The company's strategic growth initiatives are paying off, with aerospace and defense now projected to become its third-largest end market, driven by share gains and key wins on defense programs. Kennametal Inc (NYSE:KMT) is confident in its fiscal 2027 outlook, expecting broad-based growth across most end markets, with energy recast to high single-digit growth and continued strength in aerospace and defense. The company realized $27 million in restructuring savings in fiscal 2026 and remains committed to achieving $110 million in total savings by the end of fiscal 2027, supporting margin expansion. Kennametal Inc (NYSE:KMT) has taken decisive actions to enhance liquidity and extend debt maturities, providing financial flexibility to navigate the high-tungsten-price environment and capture near-term growth opportunities. The company is leveraging its core competencies in material science and application engineering to win new business and expand share of wallet with key customers across diverse end markets. Kennametal Inc (NYSE:KMT) experienced a significant negative free cash flow of -$79 million for fiscal 2026, primarily due to increased working capital requirements driven by higher tungsten prices. The company's share repurchase program remains paused due to the higher tungsten pricing and corresponding working capital needs, limiting shareholder returns through buybacks. Kennametal Inc (NYSE:KMT) faces a $0.23 per share headwind from the Bolivian government ending its preferential exchange rate program, impacting earnings. Higher interest expense is expected to be a $0.25 per share drag in fiscal 2027, reflecting increased debt levels following recent financing actions to fund working capital needs. The company's fiscal 2027 adjusted EPS outlook of $4.15 to $5.15 is essentially flat year-over-year at the midpoint, as operational momentum is offset by non-operational headwinds like FX, interest, and a higher tax rate. Kennametal Inc (NYSE:KMT) expects free operating cash flow to be only approximately 20% of net income in fiscal 2027, reflecting continued working capital pressure from elevated tungsten costs. The transportation end market remains soft, with global light vehicle production expected to decline about 1% in fiscal 2027, mainly in the Americas and Europe. In earthworks, mining share gains are partially offset by soft core markets in the US and China, and the company assumes normal seasonality and competitive pressures in road construction. The company anticipates a significant cash draw of around $200 million in the first quarter of fiscal 2027, with free cash flow not expected to turn positive until the second half of the year. Warning! GuruFocus has detected 7 Warning Sign with SU. Is KMT fairly valued? Test your thesis with our free DCF calculator. Q: Can you help reconcile the fiscal 2027 EPS bridge, specifically the normalized earnings run rate, given the $0.39 raw material timing benefit and the prior year's $3.11 price/raw impact?A: Pat Watson (VP & CFO) explained that the normalized earnings power is best understood by stripping out the tungsten-related timing effects. He noted that the fiscal 2026 "clean" EPS was approximately $1.64, and for fiscal 2027, investors should remove the full tungsten impact ($2.43 from FY26 plus the $0.39 in FY27) to arrive at the underlying core earnings. He emphasized that the price/raw benefit is heavily front-end loaded, with the tailwind dissipating by the start of the third quarter, making the second half of FY27 a cleaner representation of the business's fundamental earnings power. Q: What is the expected quarterly cadence for free cash flow in fiscal 2027, and when will it turn positive?A: Pat Watson (VP & CFO) stated that Q1 will be a sizable cash draw, approximately $200 million, which should be the high-water mark for the year. The draw will step down in Q2, and the company expects free operating cash flow to turn positive in Q3. This pattern is the mirror image of the price/raw material benefit on the income statement, driven primarily by inventory valuation. He added that in a stable tungsten environment, FY28 should return to a normalized cash generation profile. Q: Can you break down the fiscal 2027 volume growth guidance of 1% to 4% between market growth and share gains?A: Sanjay Chaalbe (President & CEO) clarified that within the 1% to 4% volume growth outlook, share gains are expected to contribute 1% to 2%, with the remainder coming from general market improvements. He highlighted that aerospace and defense is projected to be the strongest end market, followed by energy and general engineering, while earthworks is expected to be flat and transportation slightly negative. Q: In infrastructure, did the company lose potential sales due to material shortages or was it a strategic choice to prioritize certain end markets?A: Sanjay Chaalbe (President & CEO) clarified that the company was not short on material. Instead, management made deliberate choices to allocate tungsten and processing capacity to the end markets and customers that would drive the best returns for shareholders. He noted that while they could take more business if they sourced more tungsten, the constraint was more about managing overall supply chain and processing capacity to optimize profitability. Q: Regarding the Q4 exit rate, you mentioned mid-teens EBITDA margins for Q4 FY27. Can you confirm this and how we should model FY28 from that base?A: Pat Watson (VP & CFO) confirmed that the expected Q4 FY27 EBITDA margin is in the mid-teens, representing a "clean" quarter with no price/raw material timing benefit. He advised investors to use this as a jump-off point for modeling FY28, applying normal seasonality and modest incremental volume and price to generate the FY28 EBITDA profile. He also noted that in the current high-tungsten environment, volume leverage is expected to be in the mid-30s. Q: Can you explain the "operations" bucket in the FY27 EPS bridge, which appears to show a negative core contribution after backing out raw materials, incentive comp, and restructuring?A: Pat Watson (VP & CFO) explained that the $0.53 operations tailwind includes the $0.39 raw material timing favorability, lower incentive compensation, and restructuring savings. After isolating these items, the remaining core volume and wage inflation impact is modestly negative, reflecting the substantial increase in tungsten costs flowing through the business and the associated pricing actions. He emphasized that the midpoint outlook includes variability, particularly given the sheer amount of tungsten and price dynamics in the current environment. Q: What is the company's strategy regarding tariff recovery, and has there been any benefit recognized in the numbers?A: Sanjay Chaalbe (President & CEO) stated that the company has applied for and received some tariff refunds, but the amounts were immaterial to report. The broader strategy involves reinvesting any recoveries into strengthening supply chain security, network optimization, and product development. He detailed that the company's initial response to tariffs was to move thousands of parts globally and optimize the supply chain before implementing surcharges, and they continue to manage the situation holistically. Q: Given the strong Q4 results, can you provide more color on the volume performance across the two segments?A: Pat Watson (VP & CFO) noted that total company volume was up low single digits in Q4. Metal cutting performed better, with mid-single-digit volume growth, while infrastructure was roughly flat. He reiterated that within infrastructure, the company made deliberate portfolio choices regarding which customers to serve to maximize returns on available tungsten, which impacted volume but improved profitability. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Q4 sales of $737 million increased 43 percent and 42 percent on a reported and organic basis, respectively Q4 earnings per diluted share (EPS) of $2.91 and record adjusted EPS of $2.96 FY26 EPS of $4.42 and record adjusted EPS of $4.57 Company provides FY27 Q1 and annual Outlook PITTSBURGH, Aug. 5, 2026 /PRNewswire/ -- Kennametal Inc. (NYSE: KMT) (the "Company") today announced fourth quarter and fiscal 2026 results. "Our team delivered strong fiscal 2026 results, reflecting volume from improving market conditions and our strategic growth initiatives," said Sanjay Chowbey, President and CEO. "We achieved record adjusted EPS this quarter through decisive pricing actions in an unprecedented tungsten environment, volume growth and cost improvement efforts." He continued: "Looking ahead, we are encouraged by the volume trends we have seen across several end markets and expect those improving conditions, along with our strategic initiatives, to continue to drive sales growth throughout fiscal 2027. Recent wins in the Aerospace & Defense, Energy and Earthworks end markets showcase the ability of our team to take share in any market condition. I am confident that our commitment to above market growth and continuous improvement will unlock long-term value for shareholders." Fiscal 2026 Fourth Quarter Key Developments Sales of $737 million increased 43 percent from $516 million in the prior year quarter, reflecting organic sales growth of 42 percent, a favorable foreign currency exchange effect of 1 percent and a favorable business days effect of 1 percent, partially offset by a divestiture effect of 1 percent. Operating income was $303 million, or 41.1 percent margin, compared with $31 million, or 6.1 percent margin, in the prior year quarter. The increase in operating income was driven by the favorable timing of raw material-related pricing compared to costs of approximately $252 million, non-raw material-related pricing and tariff surcharges in Metal Cutting, higher sales and production volumes and incremental year-over-year restructuring savings of approximately $5 million. These factors were partially offset by higher compensation costs and tariffs and general inflation. Adjusted operating income was $306 million, or 41.5 percent margin, compared with $38 million, or 7.4 percent margin, in the prior year quarter. Fiscal 2026 Key Developments Sales of $2,357 million increased 20 percent from $1,967 million in the prior year, reflecting organic sales growth of 19 percent and a favorable foreign currency exchange effect of 2 percent, partially offset by a divestiture effect of 1 percent. Operating income was $473 million, or 20.1 percent margin, compared with $143 million, or 7.3 percent margin, in the prior year. The increase in operating income was driven by the favorable timing of raw material-related pricing compared to raw material costs of approximately $316 million, non-raw material-related pricing and tariff surcharges in Metal Cutting, higher sales and production volumes and incremental year-over-year restructuring savings of approximately $27 million. These factors were partially offset by higher compensation costs, tariffs and general inflation, and fewer insurance proceeds received within Infrastructure in the current year. Adjusted operating income was $484 million, or 20.5 percent margin, compared with $158 million, or 8.0 percent margin, in the prior year. Net cash flow from operating activities in fiscal 2026 was negative $4 million compared to positive $208 million in the prior year. The decline was driven primarily by working capital requirements, including increased inventory values resulting from unprecedented tungsten price increases, as well as advance payments made to certain suppliers to secure raw material supply. These working capital requirements were partially offset by higher net income during the year. Free operating cash flow (FOCF) was negative $79 million compared to positive $121 million in the prior year. The decrease in FOCF was driven primarily by the aforementioned working capital requirements, partially offset by higher net income and lower capital expenditures compared to the prior year. Outlook The Company's expectations for the first quarter of fiscal 2027 and the full year are as follows: Quarterly Outlook: Sales expected to be $745 - $775 million; foreign exchange anticipated to be neutral compared to the first quarter of fiscal 2026 Adjusted EPS is expected to be $2.50 - $2.80 Annual Outlook: Sales expected to be $3.33 - $3.45 billion; foreign exchange anticipated to be neutral compared to the fiscal 2026 Adjusted EPS is expected to be $4.15 - $5.15 Free operating cash flow of approximately 20 percent of adjusted net income Capital spending expected to be approximately $85 million The Company will provide more details regarding its fiscal 2027 assumptions during its quarterly earnings conference call. Fiscal 2026 Fourth Quarter Segment Results Metal Cutting sales of $398 million increased 24 percent from $321 million in the prior year quarter, reflecting organic sales growth of 22 percent, a favorable foreign currency exchange effect of 1 percent and a favorable business days effect of 1 percent. Operating income was $106 million, or 26.7 percent margin, compared to $21 million, or 6.6 percent margin, in the prior year quarter. The increase in operating income was driven by the favorable timing of raw material-related pricing compared to costs of approximately $54 million, non-raw material-related pricing and tariff surcharges, higher sales and production volumes and incremental year-over-year restructuring savings of approximately $4 million. These factors were partially offset by higher compensation costs and general inflation in the current quarter. Adjusted operating income was $108 million, or 27.3 percent margin, compared to $25 million, or 7.9 percent margin, in the prior year quarter. Infrastructure sales of $339 million increased 73 percent from $196 million in the prior year quarter, reflecting organic sales growth of 74 percent, a favorable currency exchange effect of 1 percent and a favorable business days effect of 1 percent, partially offset by a divestiture effect of 3 percent. Operating income was $197 million, or 58.3 percent margin, compared to $11 million, or 5.5 percent margin, in the prior year quarter. The increase in operating income was driven by the favorable timing of raw material-related pricing compared to costs of approximately $198 million, partially offset by lower sales and production volumes, higher compensation costs and general inflation in the current quarter. Adjusted operating income was $198 million, or 58.4 percent margin, compared to $13 million, or 6.8 percent margin, in the prior year quarter. Dividend Declared Kennametal also announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share. The dividend is payable on August 25, 2026 to shareholders of record as of the close of business on August 11, 2026. Earnings Call and Webcast The Company will discuss its fiscal 2026 fourth quarter and full year results in a live webcast at 9:30 a.m. Eastern Time, Wednesday, August 5, 2026. The conference call will be broadcast via real-time audio on Kennametal's investor relations website at https://investors.kennametal.com/ - click "Event" (located in the blue Quarterly Earnings block). This earnings release contains non-GAAP financial measures. Reconciliations and descriptions of all non-GAAP financial measures are set forth in the tables that follow. Certain statements in this release may be forward-looking in nature, or "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements that do not relate strictly to historical or current facts. For example, statements about Kennametal's outlook for sales, adjusted operating income, adjusted EPS, FOCF and capital expenditures for the first quarter and full year of fiscal 2027 and our expectations regarding future growth and financial performance are forward-looking statements. Any forward-looking statements are based on current knowledge, expectations and estimates that involve inherent risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, our actual results could vary materially from our current expectations. There are a number of factors that could cause our actual results to differ from those indicated in the forward-looking statements. They include: uncertainties related to changes in macroeconomic and/or global conditions, including as a result of increased inflation, tariffs, and Russia's invasion of Ukraine and the resulting sanctions on Russia; the conflicts in the Middle East; other economic recession; our ability to achieve all anticipated benefits of restructuring initiatives; Commercial Excellence growth initiatives, Operational Excellence initiatives, our foreign operations and international markets, such as currency exchange rates, different regulatory environments, trade barriers, exchange controls, and social and political instability, including the conflicts in Ukraine and the Middle East; changes in the regulatory environment in which we operate, including environmental, health and safety regulations; potential for future goodwill and other intangible asset impairment charges; our ability to protect and defend our intellectual property; continuity of information technology infrastructure; competition; our ability to retain our management and employees; demands on management resources; availability and cost of the raw materials we use to manufacture our products, including tungsten; product liability claims; integrating acquisitions and achieving the expected savings and synergies; global or regional catastrophic events; demand for and market acceptance of our products; business divestitures; energy costs; commodity prices; labor relations; and implementation of environmental remediation matters. Many of these risks and other risks are more fully described in Kennametal's latest annual report on Form 10-K and its other periodic filings with the Securities and Exchange Commission. We can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. We undertake no obligation to release publicly any revisions to forward-looking statements as a result of future events or developments. About Kennametal With over 85 years as an industrial technology leader, Kennametal Inc. delivers productivity to customers through materials science, tooling and wear-resistant solutions. Customers across aerospace and defense, earthworks, energy, general engineering and transportation turn to Kennametal to help them manufacture with precision and efficiency. Every day approximately 8,100 employees are helping customers in nearly 100 countries stay competitive. Kennametal generated $2.4 billion in revenues in fiscal 2026. Learn more at www.kennametal.com. Follow @Kennametal: Instagram, Facebook, LinkedIn and YouTube. NON-GAAP RECONCILIATIONS (UNAUDITED) In addition to reported results under generally accepted accounting principles in the United States of America (GAAP), the following financial highlight tables include, where appropriate, a reconciliation of adjusted results including: operating income and margin; ETR; net income attributable to Kennametal; diluted EPS; Metal Cutting operating income and margin; Infrastructure operating income and margin; FOCF; and consolidated and segment organic sales growth (all of which are non-GAAP financial measures), to the most directly comparable GAAP financial measures. Adjustments for the three months ended June 30, 2026 include restructuring and related charges, loss on early extinguishment of debt and differences in projected annual tax rates. Adjustments for the three months ended June 30, 2025 include restructuring and related charges, loss on divestiture and differences in projected annual tax rates. Adjustments for the twelve months ended June 30, 2026 include restructuring and related charges and loss on early extinguishment of debt. Adjustments for the twelve months ended June 30, 2025 include restructuring and related charges and loss on divestiture. For those adjustments that are presented 'net of tax', the tax effect of the adjustment can be derived by calculating the difference between the pre-tax and the post-tax adjustments presented. The tax effect on adjustments is calculated by preparing an overall tax calculation including the adjustments and then a tax calculation excluding the adjustments. The difference between these calculations results in the tax impact of the adjustments. Management believes that presentation of these non-GAAP financial measures provides useful information about the results of operations of the Company for the current and past periods. Management believes that investors should have available the same information that management uses to assess operating performance, determine compensation and assess the capital structure of the Company. These non-GAAP financial measures should not be considered in isolation or as a substitute for the most comparable GAAP financial measures. Investors are cautioned that non-GAAP financial measures used by management may not be comparable to non-GAAP financial measures used by other companies. Reconciliations and descriptions of all non-GAAP financial measures are set forth in the disclosures below. Reconciliations to the most directly comparable GAAP financial measures for the following forward-looking non-GAAP financial measures for the first quarter and full fiscal year of 2027 have not been provided, including but not limited to: FOCF, adjusted operating income, adjusted net income, and adjusted EPS. The most comparable GAAP financial measures are net cash flow from operating activities, operating income, and net income attributable to Kennametal, respectively. Because the non-GAAP financial measures on a forward-looking basis are subject to uncertainty and variability as they are dependent on many factors - including, but not limited to, the effect of foreign currency exchange fluctuations, impacts from potential acquisitions or divestitures, gains or losses on the potential sale of businesses or other assets, restructuring costs, asset impairment charges, gains or losses from early extinguishment of debt, the tax impact of the items above and the impact of tax law changes or other tax matters - reconciliations to the most directly comparable forward-looking GAAP financial measures are not available without unreasonable effort. Free Operating Cash Flow (FOCF) FOCF is a non-GAAP financial measure and is defined by the Company as cash provided by operations (which is the most directly comparable GAAP financial measure) less capital expenditures plus proceeds from disposals of fixed assets. Management considers FOCF to be an important indicator of the Company's cash generating capability because it better represents cash generated from operations that can be used for dividends, debt repayment, strategic initiatives (such as acquisitions) and other investing and financing activities. Organic Sales Growth Organic sales growth is a non-GAAP financial measure of sales growth (which is the most directly comparable GAAP measure) excluding the impacts of acquisitions, divestitures, business days and foreign currency exchange from year-over-year comparisons. Management believes this measure provides investors with a supplemental understanding of underlying sales trends by providing sales growth on a consistent basis. Management reports organic sales growth at the consolidated and segment levels. View original content:https://www.prnewswire.com/news-releases/kennametal-reports-fiscal-2026-and-fourth-quarter-results-302843158.html

Kennametal (KMT) came out with quarterly earnings of $2.96 per share, beating the Zacks Consensus Estimate of $2.31 per share. This compares to earnings of $0.34 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +28.14%. A quarter ago, it was expected that this engineered products maker would post earnings of $0.68 per share when it actually produced earnings of $0.77, delivering a surprise of +13.24%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Kennametal, which belongs to the Zacks Manufacturing - Tools & Related Products industry, posted revenues of $736.61 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.32%. This compares to year-ago revenues of $516.45 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Kennametal shares have added about 26.9% since the beginning of the year versus the S&P 500's gain of 13%. While Kennametal has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Kennametal was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #5 (Strong Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.26 on $667.33 million in revenues for the coming quarter and $2.74 on $2.6 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Manufacturing - Tools & Related Products is currently in the bottom 22% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Intellicheck Mobilisa, Inc. (IDN), another stock in the broader Zacks Industrial Products sector, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 13. This company is expected to post quarterly earnings of $0.03 per share in its upcoming report, which represents a year-over-year change of +400%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Intellicheck Mobilisa, Inc.'s revenues are expected to be $5.76 million, up 12.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Kennametal Inc. (KMT) : Free Stock Analysis Report Intellicheck Mobilisa, Inc. (IDN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research