KMT

Applied Industrial Technologies AIT is scheduled to release first-quarter fiscal 2027 (ended Sept. 30, 2026) results on Oct. 27, before market open. The Zacks Consensus Estimate for AIT's first-quarter revenues is pegged at $1.3 billion, indicating growth of 8% from the prior-year quarter's figure. The consensus mark for earnings is pinned at $2.86 per share, which has been stable over the past 60 days. The figure indicates growth of 8.8% from the year-ago quarter's figure. The company's earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 4.3%. In the last reported quarter, its bottom line beat the consensus estimate by 8.6%. Let us see how things have shaped up for Applied Industrial this earnings season. Applied Industrial Technologies, Inc. price-eps-surprise | Applied Industrial Technologies, Inc. Quote Applied Industrial's Service Center segment is expected to have performed well in the fiscal first quarter, driven by solid demand for technical MRO services and internal sales initiatives. Favorable demand across metals, pulp & paper, rubber & plastics, and utilities & energy markets is likely to have augmented its top-line performance. The Zacks Consensus Estimate for the Service Center segment's revenues is pegged at $824 million, indicating 5.4% growth from the year-ago figure. Strength across the company's fluid power and automation operations is likely to boost the Engineered Solutions segment's results. A strong demand environment across its industrial/mobile OEM and technology verticals is likely to have been favorable for the segment. The Zacks Consensus Estimate for the Engineered Solutions segment's revenues is pegged at $472 million, indicating 13.2% growth from the year-ago figure. Applied Industrial has remained focused on expanding its product offerings and market presence through buyouts. The company completed the acquisition of Thompson Industrial Supply in January 2026. The buyout, which has been integrated into the Service Center segment, is expected have contributed to the company's quarterly revenues. Also, the company's pricing strategy, product mix, sales channel execution and internal efficiency initiatives are likely to have supported margins during the quarter. However, rising operating costs related to growth initiatives, channel development and inflationary pressures are expected to have affected the company's bottom line. Given the company's extensive geographic presence, its operations are also exposed to foreign exchange headwinds. A stronger U.S. dollar is likely to have hurt AIT's overseas business. Our proven model does not conclusively predict an earnings beat for Applied Industrial this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as elaborated below. Earnings ESP: Applied Industrial has an Earnings ESP of 0.00% as both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at $2.86. You can uncover the best stocks before they're reported with our Earnings ESP Filter. Zacks Rank: AIT presently carries a Zacks Rank of 2. You can see the complete list of today's Zacks #1 Rank stocks here. Here are some companies which, according to our model, have the right combination of elements to beat on earnings in this reporting cycle. Emerson Electric Co. EMR has an Earnings ESP of +0.40% and a Zacks Rank of 2 at present. The company is scheduled to release fourth-quarter fiscal 2026 results on Nov. 4. Emerson's earnings beat the Zacks Consensus Estimate twice and matched on the other two occasions of the preceding four quarters, the average surprise being 1.3%. Constellium CSTM has an Earnings ESP of +14.50% and a Zacks Rank of 2 at present. The company is slated to release second-quarter 2026 results on Oct. 28. Constellium's earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 83.3%. Kennametal Inc. KMT has an Earnings ESP of +1.50% and a Zacks Rank of 3 at present. The company is slated to release first-quarter fiscal 2027 results on Nov. 4. Kennametal's earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 29.3%. 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 Applied Industrial Technologies, Inc. (AIT) : Free Stock Analysis Report Emerson Electric Co. (EMR) : Free Stock Analysis Report Kennametal Inc. (KMT) : Free Stock Analysis Report Constellium SE (CSTM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Kennametal (KMT), which belongs to the Zacks Manufacturing - Tools & Related Products industry, could be a great candidate to consider. When looking at the last two reports, this engineered products maker has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 20.69%, on average, in the last two quarters. For the last reported quarter, Kennametal came out with earnings of $2.96 per share versus the Zacks Consensus Estimate of $2.31 per share, representing a surprise of 28.14%. For the previous quarter, the company was expected to post earnings of $0.68 per share and it actually produced earnings of $0.77 per share, delivering a surprise of 13.24%. With this earnings history in mind, recent estimates have been moving higher for Kennametal. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the company is positive, which is a great sign of an earnings beat, especially when you combine this metric with its nice Zacks Rank. Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Kennametal currently has an Earnings ESP of +1.50%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #3 (Hold) indicates that another beat is possibly around the corner. We expect the company's next earnings report to be released on November 4, 2026. With the Earnings ESP metric, it's important to note that a negative value reduces its predictive power; however, a negative Earnings ESP does not indicate an earnings miss. Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate. Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. 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 This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Allegion plc ALLE is scheduled to release third-quarter 2026 results on Oct. 22, before market open. The Zacks Consensus Estimate for ALLE's third-quarter revenues is pegged at $1.13 billion, indicating growth of 6% from the prior-year quarter's figure. The consensus mark for earnings is pinned at $2.49 per share, which has increased by a penny over the past seven days. The figure indicates growth of 8.3% from the year-ago quarter's figure. The company's earnings surpassed the Zacks Consensus Estimate twice in the trailing four quarters and missed in the other two, the average surprise being 1%. In the last reported quarter, its bottom line beat the consensus estimate by 7.6%. Let us see how things have shaped up for Allegion this earnings season. Allegion plc price-eps-surprise | Allegion plc Quote Allegion's Americas segment is expected to have performed well in the third quarter, driven by stable demand across end markets like education, healthcare, government, hospitality and retail. Solid momentum in the electronics business and growth in demand for residential and non-residential products are expected to have aided the segment's performance. We expect revenues from the segment to increase 7.6% year over year to $908 million. Allegion International segment's performance is likely to have been impacted by soft demand for its products in several European markets. We expect revenues from the segment to be relatively flat year over year at $226 million. Allegion has remained focused on expanding its product offerings and market presence through buyouts. In March 2026, Allegion acquired DCI Hollow Metal through one of its subsidiaries. The acquisition enabled the company to strengthen its core mechanical portfolio. In August 2025, Allegion acquired Brisant and UAP Group Limited, strengthening its foothold in the U.K. security market. Brisant expanded the company's residential security offerings, complementing its existing non-residential portfolio. Meanwhile, UAP's extensive door hardware portfolio, supported by approximately 200 patents, trademarks and registered designs, reinforced Allegion's position in the U.K. non-residential market. These acquisitions are likely to have contributed to the company's quarterly revenues. However, rising operating costs and costs related to product innovation, channel development and growth initiatives are expected to have affected the company's bottom line. Given the company's extensive geographic presence, its operations are exposed to foreign exchange headwinds. A stronger U.S. dollar is likely to have hurt Allegion's overseas business. Our proven model predicts an earnings beat for ALLE this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below. Earnings ESP: ALLE has an Earnings ESP of +0.40% as the Most Accurate Estimate is pegged at $2.50 per share, higher than the Zacks Consensus Estimate of $2.49. You can uncover the best stocks before they're reported with our Earnings ESP Filter. Zacks Rank: ALLE presently carries a Zacks Rank of 3. You can see the complete list of today's Zacks #1 Rank stocks here. Here are some other companies which, according to our model, have the right combination of elements to beat on earnings in this reporting cycle. Emerson Electric Co. EMR has an Earnings ESP of +0.40% and a Zacks Rank of 2 at present. The company is scheduled to release fourth-quarter fiscal 2026 results on Nov. 4. Emerson's earnings beat the Zacks Consensus Estimate twice and matched on the other two occasions of the preceding four quarters, the average surprise being 1.3%. Constellium CSTM has an Earnings ESP of +14.50% and a Zacks Rank of 2 at present. The company is slated to release second-quarter 2026 results on Oct. 28. Constellium's earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 83.3%. Kennametal Inc. KMT has an Earnings ESP of +1.50% and a Zacks Rank of 3 at present. The company is slated to release first-quarter fiscal 2027 results on Nov. 4. Kennametal's earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 29.3%. 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 Allegion PLC (ALLE) : Free Stock Analysis Report Emerson Electric Co. (EMR) : Free Stock Analysis Report Kennametal Inc. (KMT) : Free Stock Analysis Report Constellium SE (CSTM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Fastenal Company FAST reported mixed third-quarter 2026 results, with earnings beating the Zacks Consensus Estimate and net sales missing the same. Year over year, however, both metrics grew notably. Customer contract wins and pricing actions supported growth, while expense leverage helped offset pressure from sales to larger accounts. Contract customer daily sales rose 18.8%, and operating margin expanded 90 basis points (bps) to 21.5%. FAST stock lost 6.2% during today's pre-market trading session after the announcement of the financial results. Fastenal's quarterly earnings of 35 cents per share surpassed the Zacks Consensus Estimate by 2.9% and increased 19.8% year over year from 29 cents per share. Net sales rose 15.5% year over year to $2.46 billion but missed the consensus mark of $2.49 billion by 1%. Fastenal Company price-consensus-eps-surprise-chart | Fastenal Company Quote Sales benefited from customer contracts signed since the first quarter of 2024 and a modest improvement in industrial production. Product pricing added approximately 240 bps to third-quarter sales growth. Currency movements created a roughly 10-bps headwind. Contract customers accounted for 76.5% of revenues, up from 73.8% a year earlier. Non-contract daily sales increased 7.8%. The number of contracts rose 6.4% to 3,744, with signings weighted toward national multi-site accounts. Average customer sites generating at least $50,000 in monthly sales increased to 3,288 from 2,771. Sales from those sites grew 27.6% to $1.46 billion, highlighting the concentration of growth among larger customers. Manufacturing contributed 76.6% of quarterly revenues, with daily sales rising 17.2%. Heavy manufacturing increased 20.2% and accounted for 44.6% of revenues, benefiting from key accounts in aerospace, machined products and industrial equipment. Other manufacturing daily sales advanced 13.2%. Non-residential construction daily sales grew 12%, marking the sixth consecutive quarter of growth. Other end markets advanced 12.4%, helped by transportation and reseller customers. Total non-manufacturing daily sales increased 12.3%. Direct material daily sales rose 18.6%, outpacing the 14.3% growth in indirect materials. Direct cutting tools and abrasives gained 19.5%, while direct non-fasteners and hardware increased 21.2%. Digital Footprint sales increased 16.1% to $1.54 billion and represented 61.4% of revenues compared with 61.3% a year ago. This measure includes sales through Fastenal Managed Inventory (FMI) technology and eBusiness transactions excluding overlapping orders. FMI sales grew 14.6% to $1.12 billion, while eBusiness sales climbed 14.8% to $721.5 million. FASTBin and FASTVend sales increased 17.6% to $827.2 million, outpacing overall company growth. Fastenal signed 7,484 weighted FASTBin and FASTVend machine-equivalent units (MEUs), up 6.2%. The installed base reached 143,878 MEUs, up 7.4%, reinforcing its emphasis on automated inventory management. Gross profit rose 14.4% to $1.1 billion, but gross margin declined approximately 40 bps to 44.8%. A mix shift toward large customers reduced gross margin by about 50 bps, while pricing relative to costs exerted a roughly 30-bps drag. That price-cost headwind narrowed about 10 bps from the preceding quarter. Sourcing savings, supplier rebates and tariff refunds provided relief. SG&A expenses increased 9.4% to $573.9 million, below revenue growth. As a share of sales, SG&A improved 130 bps to 23.3%, supported by labor productivity and fixed-cost leverage. Operating income climbed 20.2% to $530.8 million, while net income increased 19.7% to $401.6 million. Operating cash flow increased 9% year over year to $421.6 million, equaling 105% of net income compared with 115.3% a year ago. Higher receivables and inventory requirements absorbed cash as sales expanded. Year over year, accounts receivable increased 19.9%, inventories rose 3.1% and accounts payable advanced 29.3%. Free cash flow, a non-GAAP measure, totaled $349.6 million compared with $332.1 million a year earlier. It represented 87.1% of net income, down from 99%. The company returned $328.4 million to shareholders through $298.2 million in dividends and $30.2 million in repurchases. Total debt ended the quarter at $100 million, down from $195 million a year ago. Fastenal maintained its fiscal 2026 net capital investment expectation of $310-$330 million compared with $230.6 million in 2025. Spending priorities include replacing the Atlanta hub, improving distribution efficiency, completing delayed IT projects and adding trucking capacity. The company expects an ongoing tax rate of approximately 24.6%, absent discrete tax items or changes to tax law. Fastenal currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Here are some companies from the Industrial Products sector, which according to our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported. Eaton Corporation plc ETN has an Earnings ESP of +0.53% and a Zacks Rank of 2. Eaton's earnings topped the consensus mark in three of the last four quarters and met on the remaining occasion, with the average surprise being 1.3%. Earnings for the company's third quarter of 2026 are expected to grow 15% year over year. Kennametal Inc. KMT has an Earnings ESP of +1.50% and a Zacks Rank of 3. Kennametal's earnings topped the consensus mark in each of the last four quarters, with the average surprise being 29.3%. Earnings for the company's third quarter of 2026 are expected to surge a whopping 682.4% year over year. Watsco, Inc. WSO has an Earnings ESP of +0.19% and a Zacks Rank of 3. Watsco's earnings topped the consensus mark in one of the last four quarters and missed on the remaining three occasions, with the average negative surprise being 4.9%. Earnings for the company's third quarter of 2026 are expected to improve 3.8% year over year. 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 Fastenal Company (FAST) : Free Stock Analysis Report Eaton Corporation, PLC (ETN) : Free Stock Analysis Report Watsco, Inc. (WSO) : Free Stock Analysis Report Kennametal Inc. (KMT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Fastenal Company FAST is scheduled to report third-quarter 2026 results on Oct. 14, before the opening bell. In the last reported quarter, its earnings per share (EPS) met the Zacks Consensus Estimate of 33 cents but grew year over year by 15.9%. Net sales topped the consensus mark by 1.9% and grew 14.7% from the year-ago quarter. Fastenal's earnings met the consensus mark in three of the last four quarters and missed on the remaining occasion, with the average negative surprise being 0.8%. For the third quarter, FAST's Zacks Consensus Estimate for EPS has remained unchanged over the past 60 days at 34 cents. However, the estimated figure indicates 17.2% year-over-year growth. The consensus mark for net sales is pegged at $2.49 billion, indicating a 16.6% increase from the year-ago reported figure of $2.13 billion. Fastenal Company price-eps-surprise | Fastenal Company Quote Sales In the third quarter, the top-line performance of Fastenal is likely to have increased year over year because of an improving industrial backdrop. Key account wins, larger customer sites and deeper use of managed inventory and digital tools sustain market share gains, while several sales-boosting initiatives contributed additionally. The company's focus on growing its digital footprint, increasing inventory and improving picking efficiency at its hubs is expected to have paid off. Direct materials, which include fasteners, cutting tools and other production-related items, are expected to have added to the sales growth of Fastenal, led by improved demand trends for direct fasteners and hardware. Besides, its manufacturing exposure is likely to have been another major driver for its performance. Moreover, a balanced mix of on-site and off-site services, along with market share gains across various product categories, is likely to have been an additional growth contributor. If we go by the latest monthly sales report, August's daily sales grew 16.6% year over year to $38.7 million and grew 3% from July 2026. In terms of end markets in August 2026, Heavy Manufacturing and Other Manufacturing daily sales increased 21.8% and 14.3%, respectively, with Non-residential Construction growing 9.6%. In terms of customer usage, daily sales for Direct Fasteners/Hardware and Direct non-Fasteners/Hardware jumped 16.7% and 21.8%, respectively. Daily sales under Direct Cutting Tools and Abrasives also climbed 21.7% in August 2026. During the same month, the daily sales growth of contract and non-contract customers was 19% and 11%, respectively, with daily sales through eBusiness and FMI increasing 15% each. Margins The bottom line of FAST is expected to have improved during the third quarter on the back of labor productivity, fixed-cost leverage, the ongoing fastener expansion project, supply-improvement initiatives and cost control strategies. The company's efforts in controlling costs, especially container and transportation costs, are encouraging. Automating warehouses, increasing delivery efficiency through its trucking network and selling more private-label products with higher margins are likely to have aided the fourth quarter's bottom-line growth. Fastenal is likely to have faced an unfavorable customer and product mix, alongside higher freight and overhead costs, given the broader macro uncertainties spanning the economy. However, the increased leverage from top-line growth and margin expansion initiatives is expected to have more than offset these headwinds. Our proven model does not predict an earnings beat for Fastenal this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, it is not the case here. FAST's Earnings ESP: The company has an Earnings ESP of -0.97%. You can uncover the best stocks before they're reported with our Earnings ESP Filter. FAST's Zacks Rank: Currently, the stock carries a Zacks Rank of 3. You can see the complete list of today's Zacks #1 Rank stocks here. Here are some companies from the Industrial Products sector, which according to our model, also have the right combination of elements to post an earnings beat in their respective quarters to be reported. Eaton Corporation plc ETN has an Earnings ESP of +0.53% and a Zacks Rank of 2. Eaton's earnings topped the consensus mark in three of the last four quarters and met on the remaining occasion, with the average surprise being 1.3%. Earnings for the company's third quarter of 2026 are expected to grow 15% year over year. Kennametal Inc. KMT has an Earnings ESP of +1.50% and a Zacks Rank of 3. Kennametal's earnings topped the consensus mark in each of the last four quarters, with the average surprise being 29.3%. Earnings for the company's third quarter of 2026 are expected to surge a whopping 682.4% year over year. Watsco, Inc. WSO has an Earnings ESP of +0.19% and a Zacks Rank of 3. Watsco's earnings topped the consensus mark in one of the last four quarters and missed on the remaining three occasions, with the average negative surprise being 4.9%. Earnings for the company's third quarter of 2026 are expected to improve 3.8% year over year. 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 Fastenal Company (FAST) : Free Stock Analysis Report Eaton Corporation, PLC (ETN) : Free Stock Analysis Report Watsco, Inc. (WSO) : Free Stock Analysis Report Kennametal Inc. (KMT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Kennametal has delivered a strong 45.3% share price gain over the past year, which naturally puts the spotlight on whether that move is supported by the company's earnings power. With the stock now around US$29.77, the immediate question for you is how well that price lines up with what the business currently earns. The 45.3% return over the last 12 months puts recent buyers in a very different position to a year ago. The key issue is whether the earnings profile is strong enough to support that kind of rerating. The company’s value case now leans heavily on the durability of its profit margins and how efficiently it can convert those profits into cash, because those factors can anchor what investors are willing to pay for each dollar of earnings. Your read on Kennametal is one view; the desks covering it have another. See what analysts think Kennametal's shares could be worth. The issue now is whether Kennametal's current share price is justified by its earnings when judged against the Fair Ratio benchmark. If you want to stress test this same earnings question beyond Kennametal, compare it with 33 high quality undervalued stocks The P/E ratio is a useful lens for Kennametal because earnings remain a core anchor for how investors typically value an industrial manufacturer. At the current price, Kennametal trades on a P/E of about 6.6x, which is far below the Machinery industry average of roughly 24.4x and also well under the peer group average of about 37.8x. That is a wide gap for a business that is already profitable, not one that is still trying to reach consistent earnings. The Fair Ratio points to the kind of P/E that might be expected given Kennametal’s size, sector, profitability profile and risk, and the present 6.6x level sits below that reference point. For a reader, that means the stock currently carries a lower price tag for each dollar of earnings than both industry norms and what this tailored benchmark suggests might be typical. The question becomes whether the earnings base is solid enough to justify any narrowing of that gap over time. Explore the numbers behind Kennametal's P/E valuation. Narratives on Kennametal pick up where the P/E puzzle leaves off by spelling out which paths for revenue, margins and earnings would need to play out for the shares to be worth materially more or less than today’s price, and they sit on Simply Wall St’s Community page. Rather than focusing on a single valuation output, each scenario lays out the earnings assumptions behind its estimate so you can track those against Kennametal's reported results over time. The community is split between investors who see Kennametal as modestly undervalued and others who think the stock already prices in the tungsten boost. Bull case: 10% undervalued Discover why this Narrative puts Kennametal at 10% undervalued. Bear case: 10% overvalued Explore why this Narrative puts Kennametal at 10% overvalued. Price and profit metrics sketch only part of the picture for Kennametal, because recent activity from people inside the business has been flagged by our checks and the specific trades and context are for you to review. See the recent insider selling flagged for Kennametal. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include KMT. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

On August 5, Kennametal (NYSE:KMT) reported fiscal 2026 fourth-quarter results that turned a rough prior year into a record one. Sales climbed 43% to $737 million, and adjusted earnings per share hit a record $2.96 for the quarter, capping a fiscal year in which adjusted EPS reached $4.57. For a company that makes cutting tools and wear-resistant parts for industries ranging from aerospace to mining, that is a dramatic swing. But the same release that produced those headline numbers also disclosed a cash flow problem that the profit figures do not show. The scale of the turnaround shows up most clearly in margins. Fourth quarter operating margin jumped to 41.1% from just 6.1% a year earlier, and adjusted operating margin followed the same path, rising to 41.5% from 7.4%. For the full fiscal year, sales reached $2.36 billion, up 20% from $1.97 billion, with organic growth accounting for 19 points of that gain. Both of Kennametal's segments contributed. Metal Cutting sales rose 24% to $398 million in the quarter, while its operating margin more than tripled to 26.7%. Infrastructure sales jumped 73% to $339 million, and its operating margin ballooned to 58.3% from 5.5% a year ago. Management pointed to wins in the Aerospace & Defense, Energy and Earthworks end markets as evidence the company is taking share regardless of market conditions, and it is carrying that confidence into its outlook. For fiscal 2027, Kennametal is guiding to annual sales of $3.33 billion to $3.45 billion, with first quarter sales expected between $745 million and $775 million. The numbers behind the numbers tell a different story. Fiscal 2026 net cash flow from operating activities was negative $4 million, a sharp reversal from positive $208 million the prior year, and free operating cash flow swung to negative $79 million from positive $121 million. The company attributed this to working capital needs, including inventory built up in response to unprecedented tungsten price increases and advance payments made to suppliers just to lock in raw material supply. That detail matters because much of the reported margin expansion came from the favorable timing of raw material-related pricing relative to costs, a timing benefit rather than a structural one that could narrow once purchasing catches up with pricing. Infrastructure's eye-popping 58.3% operating margin arrived even as the segment's own sales and production volumes declined in the quarter, meaning the profit jump did not come from higher underlying demand there. And the fiscal 2027 adjusted EPS guidance of $4.15 to $5.15 spans a full dollar, a wide band for a company this size. Hedge fund ownership of Kennametal rose from 35 funds to 40 in the most recent quarter, which points to institutions adding to positions rather than trimming them. That accumulation is happening alongside short interest of 13.05% of float, a level that reflects real, organized skepticism rather than routine hedging. Meanwhile, the stock trades at a forward P/E of 22.12 as of September 15, a multiple that already assumes some of this earnings strength holds up. Rising fund ownership next to double-digit short interest is an unusual combination, and it suggests the market has not settled on which story about Kennametal is the right one. Kennametal's fourth quarter delivered the kind of margin and earnings numbers that are hard to ignore, but the cash flow statement tells a more cautious version of the same period. For the bullish case to hold, the pricing gains driving those margins need to prove durable rather than a temporary gap between when tungsten costs rose and when the company priced for them. For the more skeptical read to matter, the working capital drag and the reliance on pricing timing rather than volume growth in Infrastructure would need to persist into fiscal 2027. While we acknowledge the potential of KMT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In. Disclosure: None. Follow Insider Monkey on Google News.

A month has gone by since the last earnings report for Kennametal (KMT). Shares have lost about 13.1% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Kennametal due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts. Kennametal 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 42.6% 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. 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 18.7% 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, it 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. Since the earnings release, investors have witnessed a upward trend in estimates review. The consensus estimate has shifted 107.54% due to these changes. Currently, Kennametal has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for value investors. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Kennametal has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. 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 This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

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. These companies are poised for growth regardless of the political or macroeconomic climate.

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. 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