Core Viewpoint - Kennametal reported strong fiscal second-quarter results for 2026, driven by higher sales volumes, pricing actions related to high tungsten costs, and restructuring savings, leading to improved profitability metrics [4][7]. Financial Performance - The company achieved an adjusted EBITDA margin of 17.1%, up from 13.9% year-over-year, and adjusted EPS increased to $0.47 from $0.25 [1][7]. - Organic sales growth was reported at 10% year-over-year, marking the second consecutive quarter of organic growth [2][7]. - Management raised fiscal 2026 sales guidance to $2.19–2.25 billion and adjusted EPS to $2.05–2.45, with Q3 sales expected between $545–565 million and EPS between $0.50–0.60 [5][19]. Market Dynamics - The company noted that tungsten prices have increased approximately 33% year-to-date, impacting working capital and inventory levels [6][12]. - Customer buy-ahead contributed significantly to sales, with Metal Cutting generating about $10 million tied to this effect [11]. Segment Performance - Sales growth was led by Infrastructure (+11%) and Metal Cutting (+9%), with total sales rising 10% year-over-year [8][10]. - By end market, aerospace and defense grew 23%, earthworks rose 18%, and general engineering increased 8% [9]. Strategic Outlook - The company highlighted power generation and electricity demand as a multi-year growth opportunity, projecting a 3% annual growth in electricity demand through 2030 [15]. - Kennametal is positioned to capitalize on trends in gas turbines and combustion engines, with projected growth rates of 15% and 10% CAGR, respectively [16]. Cash Flow and Capital Management - Year-to-date free operating cash flow decreased to $38 million from $57 million, primarily due to working capital changes related to higher tungsten prices [17]. - The company returned $15 million through dividends but paused share repurchases due to increased working capital needs [18].