Kennametal Announces Fiscal 2027 First Quarter Results
KENNAMETAL INC (KMT) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 FOR IMMEDIATE RELEASE: DATE: November 4, 2026 Investor Relations Media Relations CONTACT: Michael Pici CONTACT: Lori Lecker PHONE: 412-790-0792 PHONE: 412-248-8224 michael.pici@kennametal.com lori.lecker@kennametal.com Kennametal Announces Fiscal 2027 First Quarter R
How this was made
The 30-second read
Why it matters
The earnings beat and reaffirmed EPS guidance provide fresh, material data for traders to reassess valuation.
Market read
The earnings surprise and reaffirmed guidance create a short‑term bullish catalyst for KMT and may influence peer industrial stocks.
What to watch
Working‑capital strain and negative free cash flow may limit near‑term cash generation despite earnings beat.
Sales of $768 million increased 54 percent on both a reported and organic basis; operating income was $379 million and record first quarter diluted EPS was $3.48.
Sales increased 54 percent, operating income reached $379 million with a 49.4 percent margin, and diluted EPS was a record $3.48. Results were materially supported by approximately $323 million of favorable timing of raw material-related pricing compared with costs, while operating cash flow and FOCF were negative because of working-capital requirements tied to tungsten and supplier advances.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Sales, three months ended September 30GAAP | $768.2M | – | 54 percent |
| Organic sales growth, three months ended September 30non-GAAP | 54% | – | 54% |
| Cost of goods sold, three months ended September 30GAAP | $254.6M | – | – |
| Gross profit, three months ended September 30GAAP | $513.6M | – | – |
| Operating expense, three months ended September 30GAAP | $126.8M | – | – |
| Restructuring and other charges, net, three months ended September 30GAAP | $5.36M | – | – |
| Amortization of intangibles, three months ended September 30GAAP | $2.15M | – | – |
| Operating income, three months ended September 30GAAP | $379.3M | – | – |
| Operating margin, three months ended September 30GAAP | 49.4 percent | – | – |
| Interest expense, three months ended September 30GAAP | $11.47M | – | – |
| Other expense (income), net, three months ended September 30GAAP | $11.06M | – | – |
| Income before income taxes, three months ended September 30GAAP | $356.7M | – | – |
| Provision for income taxes, three months ended September 30GAAP | $82.26M | – | – |
| Net income, three months ended September 30GAAP | $274.5M | – | – |
| Net income attributable to Kennametal, three months ended September 30GAAP | $271.6M | – | – |
| Basic earnings per share, three months ended September 30GAAP | $3.55 | – | – |
| Diluted earnings per share, three months ended September 30GAAP | $3.48 | – | – |
| Basic weighted average shares outstanding, three months ended September 30GAAP | 76.59M | – | – |
| Diluted weighted average shares outstanding, three months ended September 30GAAP | 78.12M | – | – |
| Net cash flow used in operating activities, three months ended September 30GAAP | −$201.3M | – | – |
| Purchases of property, plant and equipment, three months ended September 30GAAP | −$10.80M | – | – |
| Free operating cash flow, three months ended September 30non-GAAP | −$211.7M | – | – |
| Cash and cash equivalents, September 30GAAP | $272.8M | – | – |
| Inventories, September 30GAAP | $1.62B | – | – |
| Long-term debt, September 30GAAP | $1.09B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Metal CuttingOrganic sales growth of 29 percent was partially offset by an unfavorable business days effect of 1 percent. Operating-income improvement was driven by approximately $65 million of favorable timing of raw material-related pricing compared to costs, non-raw material-related pricing and tariff income, higher sales and production volumes, and approximately $2 million of incremental year-over-year restructuring savings. | $398M | – | 28 percent |
| InfrastructureOrganic sales growth was 97 percent and the favorable currency exchange effect was 1 percent. Operating-income improvement was driven by approximately $258 million of favorable timing of raw material-related pricing compared to costs, non-raw material-related pricing, and approximately $4 million from an advanced manufacturing production credit under the Inflation Reduction Act. | $370M | – | 98 percent |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Fiscal 2027 second quarter and full year outlook
- RevenueFY27 sales expected to be $3.33 - $3.45 billion
- NoteSecond quarter sales expected to be $785 - $815 million
- NoteForeign exchange anticipated to be neutral compared to the second quarter of fiscal 2026
- NoteAdjusted EPS is expected to be $1.20 - $1.50 for the second quarter of fiscal 2027
- NoteForeign exchange anticipated to be neutral compared to fiscal 2026
- NoteFY27 adjusted EPS is expected to be $5.00 - $6.00
- NoteFY27 free operating cash flow of approximately 20 percent of adjusted net income
- NoteFY27 capital spending expected to be approximately $85 million
- NoteAdjusted EBITDA margin of 16 to 19 percent in a steady-state tungsten environment
Capital returns
- Quarterly cash dividend of $0.20 per share, payable on November 23, 2026 to shareholders of record as of the close of business on November 9, 2026.
- Purchase of capital stock of $(38) (in thousands) for the three months ended September 30, 2026, compared to $(10,030) (in thousands) in the prior year period.
- Cash dividends paid to Shareholders of $(15,242) (in thousands) for the three months ended September 30, 2026, compared to $(15,136) (in thousands) in the prior year period.
What drove it
- Favorable timing of raw material-related pricing compared to costs of approximately $323 million supported consolidated operating income.
- Non-raw material-related pricing and tariff income supported consolidated operating income.
- Higher sales and production volumes in Metal Cutting supported consolidated operating income.
- Infrastructure received an incremental benefit of approximately $4 million from an advanced manufacturing production credit under the Inflation Reduction Act.
- Incremental year-over-year restructuring savings of approximately $3 million supported consolidated operating income.
Concerns
- Year-to-date net cash flow from operating activities was negative $201 million, driven primarily by working-capital requirements.
- Increased inventory values resulted from unprecedented tungsten price increases, and the Company made advance payments to certain suppliers to secure raw material supply.
- Tariffs and general inflation and higher compensation costs partially offset operating-income drivers.
- The current quarter included an impairment of an equity investment of approximately $5 million and a charge of approximately $5 million related to the write-off of certain fixed assets.
- Infrastructure operating-income drivers were partially offset by lower sales and production volumes.
What to watch
- Second-quarter fiscal 2027 sales expected to be $785 - $815 million and adjusted EPS expected to be $1.20 - $1.50.
- FY27 sales expected to be $3.33 - $3.45 billion and adjusted EPS expected to be $5.00 - $6.00.
- Working-capital requirements, including inventory values and advance payments to suppliers for raw material supply.
- Tungsten prices, which the Company said have increased eightfold since the 2023 Investor Day.
- The Company's ability to achieve adjusted EBITDA margin of 16 to 19 percent in a steady-state tungsten environment.
Balance sheet and cash flow
- Cash and cash equivalents were $272,758 (in thousands) at September 30, 2026, compared to $95,791 (in thousands) at June 30, 2026.
- Inventories were $1,615,986 (in thousands) at September 30, 2026, compared to $1,108,450 (in thousands) at June 30, 2026.
- Long-term debt was $1,094,084 (in thousands) at September 30, 2026, compared to $685,280 (in thousands) at June 30, 2026.
- Term debt borrowings were $500,000 (in thousands) and term debt repayments were $(90,616) (in thousands) for the three months ended September 30, 2026.
- Net cash flow used in investing activities was $(13,288) (in thousands), compared to $(22,706) (in thousands) in the prior year period.
- Net cash flow provided by financing activities was $391,110 (in thousands), compared to net cash flow used in financing activities of $(31,075) (in thousands) in the prior year period.
Analysis
Kennametal reported a strong fiscal 2027 first quarter. Sales were $768,193 (in thousands), up 54 percent from $497,974 (in thousands), and organic sales growth was 54%. GAAP operating income was $379,251 (in thousands), producing a 49.4 percent margin versus 7.5 percent in the prior-year quarter. Net income attributable to Kennametal was $271,585 (in thousands), while diluted earnings per share was $3.48 versus $0.30.
The principal earnings driver was approximately $323 million of favorable timing of raw material-related pricing compared to costs. Non-raw material-related pricing and tariff income, higher Metal Cutting sales and production volumes, the approximately $4 million Infrastructure production credit, and approximately $3 million of restructuring savings also supported operating income. Offsets included tariffs and general inflation, higher compensation costs, an approximately $5 million equity-investment impairment, and an approximately $5 million fixed-asset write-off charge.
Both segments increased sales, but the operating profile differed. Metal Cutting sales were $398 million, up 28 percent, with 29 percent organic growth partly offset by a 1 percent unfavorable business-days effect. Infrastructure sales were $370 million, up 98 percent, reflecting 97 percent organic growth and a 1 percent favorable currency exchange effect. Infrastructure operating income was $262 million and included approximately $258 million of favorable raw material pricing timing, while the segment also faced lower sales and production volumes.
Cash conversion was the key counterweight to reported earnings. Operating cash flow was $(201,259) (in thousands) and FOCF was $(211,654) (in thousands), compared with $17,487 (in thousands) and $(5,481) (in thousands), respectively, in the prior-year period. The Company attributed the decline to working-capital requirements, including higher inventory values from unprecedented tungsten price increases and advance payments to secure raw material supply. Inventories ended the quarter at $1,615,986 (in thousands), compared with $1,108,450 (in thousands) at June 30, 2026.
The Company reiterated FY27 sales guidance of $3.33 - $3.45 billion and raised FY27 adjusted EPS expectations to $5.00 - $6.00. It expects second-quarter sales of $785 - $815 million and adjusted EPS of $1.20 - $1.50. The outlook includes FY27 FOCF of approximately 20 percent of adjusted net income and approximately $85 million of capital spending. The longer-term framework calls for a 16 to 19 percent adjusted EBITDA margin in a steady-state tungsten environment, assuming tungsten remains at current levels.
Management, verbatim
We delivered excellent first quarter results, with sales up 54 percent and record first quarter diluted EPS of $3.48, driven primarily by the favorable timing of raw material-related pricing compared to costs and stronger Metal Cutting volumes.
Sanjay Chowbey, President and Chief Executive Officer
This performance reinforces our confidence in the fiscal 2027 sales Outlook and higher full year EPS expectations.
Sanjay Chowbey, President and Chief Executive Officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided; no comparison of actual results with prior guidance is available.
- GAAP gross margin was not reported.
- Current-quarter adjusted operating income, adjusted operating margin, adjusted net income attributable to Kennametal, and adjusted diluted EPS were not separately presented in the non-GAAP reconciliation.
- Prior-year balance-sheet amounts at September 30, 2025 were not provided.
- Prior-quarter sales, operating income, net income, EPS, gross profit, and cash-flow metrics were not provided.
- Forward-looking GAAP reconciliations for FOCF, adjusted net income, adjusted EBITDA margin, and adjusted EPS were not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Kennametal filed a Form 8‑K announcing its FY27 first‑quarter results and updated outlook.
Ticker impact
Kennametal reported FY27 Q1 results with sales up 54% to $768M and reaffirmed FY27 full-year EPS guidance.
likely upside as the market prices in the strong earnings beat and reaffirmed guidance
The 54% sales surge, record EPS of $3.48 and reaffirmed FY27 EPS outlook constitute material new information for a mid‑cap industrial company, prompting traders to consider buying on the earnings surprise.
Market effects
Strong performance may lift other metal‑cutting and industrial equipment stocks.
Positive for U.S. industrial sector and related exporters.
Limited to industrial and commodities exposure; no broad market shift expected.
Counterpoint
Higher raw material costs could compress margins if tungsten prices normalize, weighing on future earnings.
Key entities
- companyKennametal Inc.
Industrial tooling and metal‑cutting manufacturer.
