Company Performance - Kennametal reported quarterly earnings of $0.34 per share, missing the Zacks Consensus Estimate of $0.40 per share, and down from $0.49 per share a year ago, representing an earnings surprise of -15.00% [1] - The company posted revenues of $516.45 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 1.95%, and down from $543.31 million year-over-year [2] - Over the last four quarters, Kennametal has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Future Outlook - The sustainability of Kennametal's stock price movement will depend on management's commentary during the earnings call and the company's earnings outlook [3][4] - The current consensus EPS estimate for the coming quarter is $0.29 on revenues of $483.36 million, and for the current fiscal year, it is $1.41 on revenues of $2 billion [7] - The estimate revisions trend for Kennametal was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Manufacturing - Tools & Related Products industry, to which Kennametal belongs, is currently in the top 22% of over 250 Zacks industries, suggesting a positive outlook for the sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Kennametal's performance [5]

[Earnings Release Summary](index=1&type=section&id=Earnings%20Release%20Summary) [Overall Performance](index=1&type=section&id=Overall%20Performance) Kennametal's Q4 and full-year FY2025 financial performance declined, with adjusted EPS and sales decreasing Q4 & FY2025 Earnings Per Share (EPS) Summary | Period | Reported EPS | Adjusted EPS | Prior Year Reported EPS | Prior Year Adjusted EPS | | :--- | :--- | :--- | :--- | :--- | | **Q4 2025** | $0.28 | $0.34 | $0.47 | $0.49 | | **FY 2025** | $1.20 | $1.34 | $1.37 | $1.50 | Q4 & FY2025 Sales Performance | Period | Sales | Change vs Prior Year | Organic Sales Change | | :--- | :--- | :--- | :--- | | **Q4 2025** | $516 million | -5% | -5% | | **FY 2025** | $1,967 million | -4% | -4% | [Management Commentary](index=1&type=section&id=Management%20Commentary) Management implemented productivity and restructuring actions in FY2025, anticipating FY2026 headwinds but confident in strategic growth - The company faced significant headwinds from persistent market softness, tariff impacts, and foreign exchange weakness during the past year[3](index=3&type=chunk) - Strategic actions are focused on productivity, cost restructuring, footprint consolidation, and portfolio optimization, including the sale of the Goshen facility[3](index=3&type=chunk) - Despite expecting continued market headwinds in FY2026, the company is focused on strategic growth initiatives and has seen recent wins in the Aerospace & Defense and Energy end markets[3](index=3&type=chunk) [Fiscal 2025 Fourth Quarter Financial Performance](index=1&type=section&id=Fiscal%202025%20Fourth%20Quarter%20Financial%20Performance) Q4 FY2025 sales decreased 5% to **$516 million**, with operating income falling to **$31 million** due to lower volumes and costs Q4 FY2025 Operating Performance | Metric | Q4 FY2025 | Q4 FY2024 | | :--- | :--- | :--- | | **Sales** | $516 million | $543 million | | **Operating Income** | $31 million | $61 million | | **Operating Margin** | 6.1% | 11.3% | | **Adjusted Operating Income** | $38 million | $63 million | | **Adjusted Operating Margin** | 7.4% | 11.5% | - Operating income was negatively impacted by lower sales volumes, higher raw material and wage costs, a net increase in tariffs of approximately **$4 million**, and higher restructuring charges of about **$4 million**[8](index=8&type=chunk) - The company completed the sale of its Goshen, IN subsidiary, receiving **$19 million** in proceeds and recognizing a loss on divestiture of approximately **$2 million**[7](index=7&type=chunk) - Restructuring actions delivered annualized run-rate pre-tax savings of approximately **$28 million**, with total expected savings from these actions increased to **$35 million**[6](index=6&type=chunk) [Fiscal 2025 Full Year Financial Performance](index=2&type=section&id=Fiscal%202025%20Full%20Year%20Financial%20Performance) Full-year FY2025 sales decreased 4% to **$1,967 million**, with operating income and cash flow declining due to lower volumes FY2025 Operating Performance | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | **Sales** | $1,967 million | $2,047 million | | **Operating Income** | $143 million | $170 million | | **Operating Margin** | 7.3% | 8.3% | | **Adjusted Operating Income** | $158 million | $183 million | | **Adjusted Operating Margin** | 8.0% | 8.9% | FY2025 Cash Flow Summary | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | **Net Cash Flow from Operating Activities** | $208 million | $277 million | | **Free Operating Cash Flow (FOCF)** | $121 million | $175 million | - The company has achieved approximately **$65 million** in annualized run-rate pre-tax savings as of June 30, 2025, and has increased its total cost savings target from **$100 million** to **$125 million** by the end of fiscal 2027[19](index=19&type=chunk) [Business Segment Performance](index=3&type=section&id=Business%20Segment%20Performance) Both Metal Cutting and Infrastructure segments experienced Q4 FY2025 sales and operating margin declines Q4 FY2025 Metal Cutting Segment Results | Metric | Q4 FY2025 | Q4 FY2024 | | :--- | :--- | :--- | | **Sales** | $321 million | $335 million | | **Sales Change** | -4% | N/A | | **Operating Income** | $21 million | $44 million | | **Operating Margin** | 6.6% | 13.2% | Q4 FY2025 Infrastructure Segment Results | Metric | Q4 FY2025 | Q4 FY2024 | | :--- | :--- | :--- | | **Sales** | $196 million | $209 million | | **Sales Change** | -6% | N/A | | **Operating Income** | $11 million | $18 million | | **Operating Margin** | 5.5% | 8.5% | [Fiscal 2026 Outlook](index=3&type=section&id=Fiscal%202026%20Outlook) Kennametal projects FY2026 sales between **$1.95 billion** and **$2.05 billion**, with adjusted EPS from **$0.90** to **$1.30** Q1 Fiscal 2026 Outlook | Metric | Guidance | | :--- | :--- | | **Sales** | $465 - $485 million | | **Adjusted EPS** | $0.20 - $0.30 | Full Year Fiscal 2026 Outlook | Metric | Guidance | | :--- | :--- | | **Sales** | $1.95 - $2.05 billion | | **Adjusted EPS** | $0.90 - $1.30 | | **Free Operating Cash Flow** | ~120% of adjusted net income | | **Capital Spending** | ~$90 million | [Shareholder Returns](index=2&type=section&id=Shareholder%20Returns) The company returned **$122 million** to shareholders in FY2025 and declared a **$0.20** quarterly dividend - Returned a total of **$122 million** to shareholders in FY25, consisting of **$62 million** in dividends and **$60 million** in share repurchases[5](index=5&type=chunk)[18](index=18&type=chunk) - During Q4, the company repurchased **232 thousand shares** for **$5 million**; inception-to-date, **$60 million** has been spent under the **$200 million** three-year repurchase program[11](index=11&type=chunk) - The Board of Directors declared a quarterly cash dividend of **$0.20 per share**, payable on August 26, 2025[24](index=24&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) FY2025 sales decreased to **$1.97 billion**, resulting in lower gross profit and net income, with diluted EPS falling to **$1.20** FY2025 vs FY2024 Income Statement Highlights (in thousands) | Metric | Twelve Months Ended June 30, 2025 | Twelve Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Sales** | $1,966,845 | $2,046,899 | | **Gross Profit** | $598,070 | $627,093 | | **Operating Income** | $143,123 | $170,223 | | **Net Income Attributable to Kennametal** | $93,125 | $109,323 | | **Diluted EPS** | $1.20 | $1.37 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$2.55 billion**, with cash and inventories also rising Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $140,540 | $127,971 | | **Total current assets** | $1,039,270 | $1,002,592 | | **Total assets** | $2,545,412 | $2,503,758 | | **Total current liabilities** | $422,329 | $415,961 | | **Long-term debt** | $596,788 | $595,980 | | **Total liabilities** | $1,220,764 | $1,215,159 | | **Total Kennametal shareholders' equity** | $1,283,979 | $1,249,875 | [Condensed Consolidated Statements of Cash Flow](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) FY2025 net cash from operating activities decreased to **$208.3 million**, resulting in a net cash increase of **$12.6 million** Cash Flow Summary (in thousands) | Metric | Year ended June 30, 2025 | Year ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash flow provided by operating activities** | $208,324 | $277,108 | | **Net cash flow used for investing activities** | $(61,825) | $(109,426) | | **Net cash flow used for financing activities** | $(133,919) | $(141,747) | | **Net increase in cash and cash equivalents** | $12,569 | $21,950 | [Segment Data](index=10&type=section&id=Segment%20Data) FY2025 Metal Cutting sales were **$1.22 billion** and Infrastructure **$747.2 million**, with all segments and regions declining FY2025 Sales & Operating Income by Segment (in thousands) | Segment | FY2025 Sales | FY2024 Sales | FY2025 Operating Income | FY2024 Operating Income | | :--- | :--- | :--- | :--- | :--- | | **Metal Cutting** | $1,219,686 | $1,280,781 | $86,375 | $132,573 | | **Infrastructure** | $747,159 | $766,118 | $58,465 | $39,857 | FY2025 Sales by Geographic Region (in thousands) | Region | FY2025 Sales | FY2024 Sales | | :--- | :--- | :--- | | **Americas** | $967,608 | $1,012,969 | | **EMEA** | $601,087 | $628,536 | | **Asia Pacific** | $398,150 | $405,394 | [Non-GAAP Reconciliations](index=11&type=section&id=Non-GAAP%20Reconciliations) [Reconciliation of Non-GAAP Measures](index=11&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) Non-GAAP measures, including adjusted EPS of **$1.34** and FOCF of **$121.2 million**, offer insights into operational performance - Management presents non-GAAP measures like adjusted operating income, adjusted EPS, and FOCF to provide useful information about the company's operational results, excluding certain items[38](index=38&type=chunk) FY2025 GAAP to Non-GAAP EPS Reconciliation | Metric | Amount | | :--- | :--- | | **Reported Diluted EPS** | $1.20 | | Restructuring and related charges | $0.13 | | Loss on divestiture | $0.01 | | **Adjusted Diluted EPS** | $1.34 | Free Operating Cash Flow (FOCF) Reconciliation (in thousands) | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | **Net cash flow from operating activities** | $208,324 | $277,108 | | Purchases of property, plant and equipment | $(88,971) | $(107,561) | | Proceeds from disposals of property, plant and equipment | $1,841 | $5,425 | | **Free operating cash flow** | $121,194 | $174,972 |

Core Viewpoint - Kennametal (KMT) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Company Performance and Outlook - The upgrade for Kennametal suggests an improvement in the company's underlying business, which is expected to drive the stock price higher [5]. - The Zacks Consensus Estimate for Kennametal indicates an expected earnings of $1.40 per share for the fiscal year ending June 2025, with a 2.4% increase in estimates over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - Kennametal's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Viewpoint - Momentum investing contrasts with the traditional "buy low and sell high" strategy, focusing instead on "buying high and selling higher" to capitalize on fast-moving stocks [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum if their future growth does not justify high valuations [1] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, identified through tools like the Zacks Momentum Style Score [2] Group 2: Kennametal (KMT) Stock Analysis - Kennametal (KMT) has shown a price increase of 12.4% over the past four weeks, indicating growing investor interest [3] - KMT has gained 26.4% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [4] - The stock has a beta of 1.4, suggesting it moves 40% more than the market in either direction, indicating fast-paced momentum [4] - KMT holds a Momentum Score of B, suggesting it is an opportune time to invest in the stock [5] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [6] - KMT is trading at a Price-to-Sales ratio of 0.94, indicating it is reasonably valued at 94 cents for each dollar of sales [6] Group 3: Additional Investment Opportunities - Besides KMT, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting additional investment opportunities [7] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [8]

Group 1 - Kennametal Inc. will host its fourth quarter and fiscal 2025 earnings call on August 6, 2025, at 9:30 am ET [1] - The earnings call will be led by Sanjay Chowbey, President and CEO, and Patrick Watson, Vice President and CFO [1] - The press release and presentation will be available on the company's website before the market opens on August 6 [1] Group 2 - Kennametal has over 85 years of experience as an industrial technology leader, focusing on materials science, tooling, and wear-resistant solutions [2] - The company serves customers in various sectors, including aerospace and defense, earthworks, energy, general engineering, and transportation [2] - Kennametal generated $2 billion in revenues in fiscal 2024, with approximately 8,400 employees supporting customers in nearly 100 countries [2]

Core Insights - Kennametal Inc. has been recognized as one of America's Best Midsize Companies for 2025 by TIME and Statista, highlighting its leadership in employee satisfaction and sustainability transparency [1][2] - The recognition reflects Kennametal's commitment to sustainable growth, an engaged workforce, and long-term value creation for stakeholders [2] - This accolade follows Kennametal's inclusion in TIME's World's Best Companies 2024 list, reinforcing its strong performance and values-driven culture [2] Company Overview - Kennametal has over 85 years of experience as an industrial technology leader, providing productivity solutions through materials science, tooling, and wear-resistant solutions [3] - The company serves various sectors including aerospace and defense, earthworks, energy, general engineering, and transportation, helping customers manufacture with precision and efficiency [3] - Kennametal employs approximately 8,400 individuals across nearly 100 countries and generated $2 billion in revenues in fiscal 2024 [3]

Core Insights - Kennametal Inc. (KMT) is positioned to benefit from strong momentum in its end markets, a robust product portfolio, product innovations, and a solid capital-deployment strategy [1][3] - The company has a market capitalization of $1.8 billion and its stock has increased by 8.1% over the past month, outperforming the industry growth of 4.9% [1] Business Strength - KMT is experiencing positive trends that support long-term growth, including increased U.S. and international defense spending and digitalization [3] - Improved supply chain conditions and rising original equipment manufacturer build rates in the aerospace market in EMEA are favorable for KMT [3] - For fiscal 2025, KMT anticipates revenue growth from aerospace and defense markets compared to the previous year [3] Strong Product Portfolio - The company benefits from a well-diversified product portfolio and ongoing investments in product development [4] - Notable product introductions include TopSwiss Inserts, HARVI TE Duo-Lock, KSEM ST Line, Through Coolant ER Collets, FV Geometry Inserts, and Chip Fan [4] Strategic Investments - KMT is focused on strategic partnerships and investments in manufacturing facilities to enhance growth [5] - In May 2025, KMT invested in Toolpath Labs, an AI-powered computer-aided manufacturing software company, to expand its digital capabilities for manufacturing customers globally [5] Shareholder-Friendly Policies - KMT is committed to rewarding shareholders through dividends and share repurchases [6] - In the first nine months of fiscal 2025, the company distributed $46.6 million in dividends and repurchased shares worth $55.1 million [6] - The company completed its initial share repurchase program in 2024 and authorized a new $200 million repurchase program in February 2024, valid for three years [7] Earnings Momentum - KMT's earnings per share (EPS) estimate for 2025 has increased by 24% in the past 60 days, indicating improving earnings momentum [9] - The Zacks Consensus Estimate for KMT's fiscal 2025 earnings has risen by 24%, while the estimate for fiscal 2026 has increased by 7.8% [10]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach, aiming for quicker profits [1] Group 1: Momentum Investing Characteristics - Fast-moving trending stocks can be difficult to enter at the right time, as they may lose momentum if future growth does not justify their high valuations [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score to identify potential opportunities [3] Group 2: Kennametal (KMT) Stock Analysis - Kennametal (KMT) has shown a price increase of 1.3% over the past four weeks, indicating growing investor interest [4] - KMT has gained 2.9% over the past 12 weeks, with a beta of 1.4, suggesting it moves 40% more than the market [5] - KMT has a Momentum Score of A, indicating a favorable time to invest based on momentum [6] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investors [7] - KMT is trading at a Price-to-Sales ratio of 0.84, suggesting it is undervalued at 84 cents for each dollar of sales [7] Group 3: Additional Investment Opportunities - Besides KMT, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Core Viewpoint - Kennametal Inc. has completed the sale of its Goshen, IN business, which is a strategic move aimed at improving sales mix, reducing material cost volatility, and focusing on long-term priorities to enhance stakeholder value [1][2]. Financial Summary - The company received $19 million from the transaction, resulting in an immaterial pre-tax loss. The proceeds are subject to customary post-closing adjustments and an EBITDA-based earn-out opportunity after three years [2]. - The proceeds from the sale are expected to be used for general corporate purposes [2]. Business Impact - The Goshen subsidiary, Kennametal Stellite, L.P., serves the surface coating and welding products markets and represents less than 2% of Kennametal's total sales, making it immaterial to the company's overall profitability [3]. Company Overview - Kennametal Inc. has over 85 years of experience as an industrial technology leader, providing productivity solutions through materials science and tooling [4]. - The company generated $2 billion in revenues in fiscal 2024 and employs approximately 8,400 people across nearly 100 countries [4].

Core Viewpoint - Kennametal (KMT) shares have increased by approximately 5.2% since the last earnings report, outperforming the S&P 500, raising questions about the sustainability of this positive trend leading up to the next earnings release [1] Group 1: Earnings Estimates - Fresh estimates for Kennametal have trended upward over the past month, with the consensus estimate shifting by 7.73% [2] - The stock has an average Growth Score of C, a Momentum Score of A, and a Value Score of B, resulting in an aggregate VGM Score of A [3] Group 2: Outlook - The upward trend in estimates for Kennametal appears promising, with a Zacks Rank of 3 (Hold), indicating expectations for an in-line return in the coming months [4] Group 3: Industry Performance - Kennametal is part of the Zacks Manufacturing - Tools & Related Products industry, where Stanley Black & Decker (SWK) has gained 5.8% over the past month [5] - Stanley Black & Decker reported revenues of $3.74 billion for the last quarter, reflecting a year-over-year decline of 3.2%, with an EPS of $0.75 compared to $0.56 a year ago [5] - For the current quarter, Stanley Black & Decker is expected to post earnings of $0.35 per share, indicating a significant decline of 67.9% from the previous year, with a Zacks Rank of 5 (Strong Sell) [6]