Kennametal (NYSE:KMT) Posts Earnings Results, Beats Estimates By $0.83 EPS

Kennametal (NYSE:KMT) announced its earnings results on Wednesday. The industrial products company reported $3.48 EPS for the quarter, beating analysts’ consensus estimates of $2.65 by $0.83, FiscalAI reports. Kennametal had a net margin of 14.53% and a return on equity of 24.83%. The firm had revenue of $768.19 million for the quarter, compared to analysts’ expectations of $770.36 million. During the same quarter in the previous year, the business posted $0.34 EPS. The company’s quarterly revenue was up 54.3% on a year-over-year basis.

Here are the key takeaways from Kennametal’s conference call:

• Kennametal reported first-quarter sales up 54% organically and EPS of $3.48, exceeding the midpoint of its outlook; results were substantially boosted by favorable tungsten price-cost timing. Metal Cutting posted its fourth consecutive quarter of volume growth, with mid-single-digit gains and share capture in key markets.
• Management cited growth initiatives, pricing, lean transformation and portfolio actions as supports for its long-term target of 16%–19% EBITDA margins, assuming tungsten prices remain elevated.
• Infrastructure volumes fell at a low-double-digit rate amid price sensitivity, slower Chinese mining activity and limited product substitution. Management expects only modest recovery in Q2, with most of the anticipated rebound weighted to the second half.
• FY2027 adjusted EPS guidance is $5–$6, including an estimated $0.97 favorable price-cost timing benefit; falling tungsten prices are expected to create headwinds in Q3 and Q4, with Q4 EBITDA margin projected in the low double digits.
• Year-to-date free operating cash flow was negative $212 million, largely due to higher-cost tungsten inventory and supplier advances; inventory value has tripled in 18 months. Share repurchases remain paused until free operating cash flow turns positive.

Kennametal Trading Down 11.2%

Shares of KMT traded down $2.94 during midday trading on Thursday, hitting $23.34. The stock had a trading volume of 2,170,509 shares, compared to its average volume of 1,416,354. The company has a debt-to-equity ratio of 0.42, a current ratio of 2.62 and a quick ratio of 0.98. Kennametal has a 1 year low of $23.08 and a 1 year high of $43.81. The firm has a market cap of $1.78 billion, a PE ratio of 5.30, a price-to-earnings-growth ratio of 0.29 and a beta of 1.30. The stock’s 50 day moving average is $30.38 and its 200 day moving average is $34.52.

Kennametal Announces Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Monday, November 23rd. Shareholders of record on Monday, November 9th will be given a dividend of $0.20 per share. The ex-dividend date is Monday, November 9th. This represents a $0.80 dividend on an annualized basis and a yield of 3.4%. Kennametal’s payout ratio is 18.18%.

Kennametal News Summary

Here are the key news stories impacting Kennametal this week:

• Positive Sentiment: Fiscal first-quarter adjusted EPS was $3.48, beating analyst expectations of about $2.65, while sales rose 54% year over year to $768 million. Kennametal raised its fiscal 2027 adjusted EPS outlook and reiterated its full-year sales outlook. Kennametal fiscal 2027 first-quarter results
• Positive Sentiment: Management cited favorable timing of raw-material-related pricing relative to costs and stronger Metal Cutting volumes as key profit drivers, and reaffirmed a 16%–19% adjusted EBITDA margin profile beyond fiscal 2027, assuming tungsten prices remain at current levels. Q1 earnings call highlights
• Neutral Sentiment: Despite the strong EPS result, quarterly revenue came in below analyst estimates, limiting the impact of the earnings beat. Kennametal reports sales below estimates
• Negative Sentiment: The call also highlighted weaker Infrastructure volumes and cash-flow pressure. Investors may be concerned that tungsten-related pricing gains and favorable cost timing are supporting earnings, while exposure to tungsten prices creates risk if those conditions reverse. Q1 earnings call highlights

Wall Street Analysts Forecast Growth

A number of research analysts recently weighed in on the company. DA Davidson reduced their price objective on Kennametal from $34.00 to $30.00 and set a “neutral” rating for the company in a research report on Tuesday, August 11th. Zacks Research lowered shares of Kennametal from a “strong-buy” rating to a “hold” rating in a research report on Wednesday, October 14th. Morgan Stanley cut Kennametal from an “equal weight” rating to an “underweight” rating and decreased their target price for the stock from $31.00 to $27.00 in a report on Monday, August 10th. JPMorgan Chase & Co. reduced their price objective on shares of Kennametal from $34.00 to $30.00 and set an “underweight” rating for the company in a research note on Thursday, October 8th. Finally, Weiss Ratings cut Kennametal from a “buy (b-)” rating to a “hold (c+)” rating in a report on Friday, October 23rd. Five research analysts have rated the stock with a Hold rating and four have given a Sell rating to the company’s stock. According to data from MarketBeat.com, the stock has a consensus rating of “Reduce” and an average price target of $33.50.

Insider Activity at Kennametal

In related news, CEO Sanjay Chowbey acquired 7,000 shares of the firm’s stock in a transaction that occurred on Thursday, September 10th. The stock was bought at an average price of $29.10 per share, for a total transaction of $203,700.00. Following the acquisition, the chief executive officer directly owned 246,839 shares of the company’s stock, valued at $7,183,014.90. This represents a 2.92% increase in their position. The acquisition was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, VP Judith L. Bacchus sold 9,676 shares of the firm’s stock in a transaction on Tuesday, September 8th. The shares were sold at an average price of $30.29, for a total value of $293,086.04. Following the transaction, the vice president owned 15,721 shares in the company, valued at approximately $476,189.09. This represents a 38.10% decrease in their position. The disclosure for this sale is available in the SEC filing. Corporate insiders own 1.65% of the company’s stock.

Kennametal Company Profile

Kennametal Inc (NYSE: KMT) is a global industrial technology company that develops and manufactures tooling, engineered components and wear-resistant solutions. Its products are designed to help customers improve productivity, durability and performance in demanding manufacturing and industrial applications.

The company’s offerings include metal-cutting tools and systems, tooling components, advanced materials, and products made with hard metals and other wear-resistant technologies. Kennametal also provides engineered solutions for applications such as machining, earthworks, energy production, transportation, aerospace, defense and general engineering.

Founded in 1938 by Philip M.