Kennametal's Q1 Earnings & Revenues Top Estimates, Increase Y/Y

Core Insights - Kennametal Inc. (KMT) reported adjusted earnings of 34 cents per share for Q1 fiscal 2026, exceeding the Zacks Consensus Estimate of 24 cents, marking an 18% increase year over year [1][9] Revenue Details - KMT's revenues reached $498 million, a 3% increase from the previous year, surpassing the Zacks Consensus Estimate of $473 million [2][9] - Organic sales also rose by 3% year over year, with foreign currency translation contributing positively by 1% and divestitures negatively impacting by 1% [2] - Revenue breakdown: - American operations: $247.6 million, up 4.2% year over year [3] - EMEA region: $153.3 million, up 5.1% year over year [3] - Asia Pacific: $97.1 million, down 1.2% year over year [3] - Segment performance: - Metal Cutting segment: $310.6 million, up 5% year over year, exceeding the consensus estimate of $293 million [3] - Infrastructure segment: $187.3 million, up 1% year over year, surpassing the consensus estimate of $180 million [4] Margin Profile - Cost of goods sold increased by 3.8% year over year to $343.4 million, while gross profit rose by 2.3% to $154.6 million, resulting in a margin decrease of 30 basis points to 31% [5] - Operating income increased by 4.3% year over year to $37.6 million, with an operating margin stable at 7.5% [6] Balance Sheet and Cash Flow - Cash and cash equivalents at the end of Q1 were $103.5 million, down from $140.5 million at the end of fiscal 2025 [7] - Long-term debt slightly increased to $597 million from $596.8 million [7] - Net cash generated from operating activities was $17.5 million, down from $45.7 million in the previous year [8] - Free operating cash flow was negative $5.5 million compared to positive $21.1 million in the prior year [8] Guidance - KMT raised its fiscal 2026 sales guidance to $2.10-$2.17 billion, up from the previous estimate of $1.95-$2.05 billion, and adjusted EPS guidance to $1.35-$1.65 from 90 cents-$1.30 [12] - For Q2 fiscal 2026, sales are expected to be in the range of $500-$520 million, with adjusted EPS anticipated between 30-40 cents [13] Dividend Update - KMT's board approved a quarterly cash dividend of 20 cents per share, payable on November 24, 2025 [11]