Kennametal Posts Record $768 Million in Sales and $3.48 EPS
Key Facts
Kennametal said sales reached $768 million in the first quarter of fiscal 2027, ended Sept. 30, up 54% from $498 million in the year-earlier period. The company reported diluted earnings per share of $3.48, which it described as a first-quarter record. CEO Sanjay Choubey said sales rose 54% and diluted earnings per share reached a record. He attributed the results mainly to favorable timing of raw-material pricing relative to costs, alongside higher Metal Cutting volumes. These factors provide context for the surge in operating income, while operating cash flow remained negative.
Operating income was $379 million, with a margin of 49.4%, compared with $38 million and a 7.5% margin in the year-earlier quarter. Metal Cutting sales rose to $398 million, up 28%, while its operating income was $118 million, with a margin of 29.7%. Infrastructure sales were $370 million, up 98%, and operating income was $262 million, with a margin of 70.7%. Sales were split between the two segments, with Infrastructure posting faster growth and a higher operating margin in the quarter. Choubey said the improvement in results was tied to the timing of raw-material pricing relative to costs and stronger Metal Cutting volumes.
The increase in profitability did not translate into positive operating cash flow during the quarter: net cash used in operating activities was $201 million, compared with positive cash flow of $17 million in the year-earlier period. The company attributed this to working-capital needs, higher inventory following increases in tungsten prices, and advance payments to suppliers. Kennametal said in its annual report that tungsten costs remained at historically high levels and that it had taken pricing and other actions to address their impact. It also said higher prices affected working capital and free operating cash flow. Working capital therefore stands alongside profitability in assessing the quarter’s results.
The quarterly results follow fiscal 2026, when sales reached $2.4 billion, an organic increase of 19% from the prior year. Adjusted earnings per share rose to $4.57 that year, compared with $1.34 in fiscal 2025. The company also recorded $27 million in restructuring savings in fiscal 2026 and maintained its target of achieving $110 million in savings by the end of fiscal 2027. This prior performance places the quarterly results within a trajectory of annual improvement in sales and profitability, while tungsten costs and working capital remain among the factors the company cited in the context of its operations. The CEO specifically linked the quarter’s results to pricing timing and Metal Cutting volumes.
Kennametal expects second-quarter fiscal 2027 sales of $785 million to $815 million and adjusted earnings per share of $1.20 to $1.50. For fiscal 2027, it set a sales range of $3.33 billion to $3.45 billion and adjusted earnings per share of $5 to $6. The CEO said the company expects an adjusted EBITDA margin of 16% to 19% in a stable tungsten-price environment, assuming prices remain at current levels. The company also declared a quarterly cash dividend of $0.20 per share, payable Nov. 23, 2026, to shareholders of record on Nov. 9. The results statement was scheduled to be released before the market opened on Nov. 4, with an earnings call at 9:30 a.m. Eastern time that day.
Kennametal shares, listed under the ticker KMT, closed at $30.53 in the Nov. 3, 2026 session, after opening at $31.01. The stock traded between $30.53 and $31.51 during the session. This close was from the session before the company’s scheduled results announcement on Nov. 4. The price record provided with the data did not include share-price movement after the results were released. The recorded price therefore remains a reference for the Nov. 3 session, while the company scheduled its earnings call for the following morning.