Kennametal's Q2 Earnings & Revenues Top Estimates, Increase Y/Y

Core Insights - Kennametal Inc. (KMT) reported adjusted earnings of 47 cents per share for Q2 FY26, exceeding the Zacks Consensus Estimate of 35 cents, marking an 89% increase year-over-year [1] - The company generated revenues of $530 million, a 10% increase from the previous year, surpassing the Zacks Consensus Estimate of $516.1 million [2] Revenue Details - Revenues from American operations rose 13% year-over-year to $265.2 million, while Europe, the Middle East, and Africa contributed $156.3 million, up 7%, and Asia Pacific sales increased 7% to $108.1 million [3] - The Metal Cutting segment reported revenues of $331.1 million, an 11% increase year-over-year, with organic revenues growing 9% [3] - The Infrastructure segment's revenues totaled $198.5 million, up 8% year-over-year, with organic revenues increasing 11% [4] Margin Profile - Cost of goods sold increased by 5.5% year-over-year to $355.7 million, while gross profit rose 19.9% to $173.9 million, resulting in a gross margin of 32.8% [5] - Operating income increased 66.3% year-over-year to $52.7 million, with an operating margin of 9.9%, up 330 basis points [6] Balance Sheet and Cash Flow - Cash and cash equivalents at the end of Q2 FY26 were $129.3 million, down from $140.5 million at the end of FY25, while long-term debt slightly increased to $597.2 million [7] - Net cash generated from operating activities in the first six months of FY26 was $72.6 million, compared to $100.9 million in the same period last year [8] Dividend and Guidance - The board approved a quarterly cash dividend of 20 cents per share, payable on February 24, 2026 [11] - The updated fiscal 2026 outlook projects sales between $2.19 billion and $2.25 billion, with adjusted EPS expected to be in the range of $2.05 to $2.45 [12] Future Expectations - For Q3 FY26, sales are anticipated to be between $545 million and $565 million, with adjusted EPS expected in the range of 50 to 60 cents [13]