Kennametal Sets Fiscal 2027 Adjusted EPS at $5.00–$6.00

The Tip Desk · November 11, 2026 · 3 min read

The industrial technology company posted $768 million in sales, up 54 percent, and record first-quarter diluted earnings of $3.48 a share, then set full-year adjusted EPS guidance at $5.00–$6.00.

Kennametal Inc. (KMT) reported sales of $768 million for the fiscal 2027 first quarter ended September 30, 2026, up 54 percent from $498 million a year earlier, with organic growth matching the reported rate.

Operating income was $379 million, or a 49.4 percent margin, compared with $38 million, or 7.5 percent, in the year-ago quarter. First-quarter diluted earnings were a record $3.48 a share.

President and Chief Executive Officer Sanjay Chowbey said the results were driven primarily by the favorable timing of raw material-related pricing compared with costs and stronger Metal Cutting volumes.

The company attributed the operating-income increase to about $323 million of favorable raw-material pricing timing, non-raw-material-related pricing and tariff income, higher Metal Cutting sales and production volumes, an incremental $4 million advanced manufacturing production credit under the Inflation Reduction Act in Infrastructure, and about $3 million of incremental year-over-year restructuring savings. Those items were partially offset by tariffs and general inflation, higher compensation costs, an impairment of an equity investment of about $5 million, and a charge of about $5 million related to the write-off of certain fixed assets. Operating income was not adjusted in the current quarter.

Infrastructure had higher operating income than Metal Cutting. Sales there were $370 million, up 98 percent from $187 million, reflecting 97 percent organic growth and a 1 percent favorable currency effect. Operating income was $262 million, or a 70.7 percent margin, versus $17 million, or 8.9 percent, a year earlier. The company said the increase came from about $258 million of favorable raw-material pricing timing, non-raw-material-related pricing, and the $4 million Inflation Reduction Act credit, partially offset by lower sales and production volumes, tariffs and inflation, higher compensation costs, and a $3 million fixed-asset write-off.

Metal Cutting sales were $398 million, up 28 percent from $311 million, reflecting 29 percent organic growth and a 1 percent unfavorable business-days effect. Operating income was $118 million, or a 29.7 percent margin, compared with $22 million, or 6.9 percent. The company cited about $65 million of favorable raw-material pricing timing, non-raw-material-related pricing and tariff income, higher sales and production volumes, and about $2 million of incremental restructuring savings, partially offset by the $5 million equity-investment impairment, higher compensation costs, and tariffs and inflation.

Cash generation moved the other way. Year-to-date net cash flow from operating activities was negative $201 million, compared with positive $17 million in the prior year period. Year-to-date free operating cash flow was negative $212 million, versus negative $5 million. The company said the decline was driven primarily by working capital, including higher inventory values from unprecedented tungsten price increases and advance payments to suppliers to secure raw material supply, partially offset by higher net income. Inventories were $1.62 billion at September 30.

Kennametal reiterated its fiscal 2027 full-year sales outlook of $3.33 billion to $3.45 billion and set full-year adjusted EPS guidance at $5.00 to $6.00. For the second quarter it expects sales of $785 million to $815 million and adjusted EPS of $1.20 to $1.50. It expects free operating cash flow of about 20 percent of adjusted net income for the year and capital spending of about $85 million.

The company said that in a steady-state tungsten environment it expects a 16 to 19 percent adjusted EBITDA margin profile, assuming tungsten stays at current levels, which it said have increased eightfold since its 2023 Investor Day.

The board declared a quarterly cash dividend of $0.20 a share, payable November 23, 2026.