Kennametal (NYSE: KMT) lifts Q3 2026 earnings and raises full-year outlook
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Kennametal Inc. reported strong fiscal 2026 third quarter results, with sales of $592.6 million, up 22% from $486.4 million, and organic sales growth of 19%. Operating income rose to $79.4 million, a 13.4% margin, driven largely by favorable tungsten pricing, higher volumes and restructuring savings.
Net income attributable to Kennametal increased to $58.2 million, with diluted EPS of $0.75, up 85% from $0.41. Adjusted EPS was $0.77, up 65%. The company raised its full-year 2026 outlook, now expecting sales of $2.33–$2.35 billion and adjusted EPS of $3.75–$4.00, and declared a quarterly dividend of $0.20 per share.
Positive
- Strong growth and margins: Q3 2026 sales rose 22% to $592.6 million, operating income increased to $79.4 million with margin expanding to 13.4% from 9.1%, and adjusted EPS climbed 65% to $0.77.
- Raised full-year outlook: The company increased its fiscal 2026 expectations to sales of $2.33–$2.35 billion and adjusted EPS of $3.75–$4.00, indicating greater confidence in its performance trajectory.
Negative
- Weaker free cash flow: Year-to-date free operating cash flow declined to $17.7 million from $62.7 million in the prior-year period, largely due to higher inventory associated with the rise in tungsten prices.
Insights
Kennametal posted strong Q3 growth, margin expansion and raised full-year guidance.
Kennametal delivered robust Q3 fiscal 2026 performance. Sales rose to $592.6M, up 22%, with 19% organic growth. Operating income nearly doubled to $79.4M, lifting margin to 13.4% from 9.1%, helped by favorable tungsten pricing, higher volumes and restructuring savings.
Diluted EPS increased to $0.75 from $0.41, while adjusted EPS reached $0.77, up 65%. Segment performance was broad-based, with Metal Cutting and Infrastructure both showing double-digit sales and margin gains, including Infrastructure adjusted operating margin of 18.3%.
The company raised full-year fiscal 2026 expectations to sales of $2.33–$2.35B and adjusted EPS of $3.75–$4.00, signaling confidence in demand and pricing dynamics, particularly in tungsten. Year-to-date free operating cash flow of $17.7M, down from $62.7M, reflects higher inventory tied to tungsten prices, an area that subsequent disclosures may further detail.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q3 2026 Sales: $592.6M
Q3 2026 Diluted EPS: $0.75
Q3 2026 Adjusted EPS: $0.77
+5 more
8 metrics
Q3 2026 Sales
$592.6M
Three months ended March 31, 2026; up 22% from $486.4M
Q3 2026 Diluted EPS
$0.75
Three months ended March 31, 2026; up from $0.41
Q3 2026 Adjusted EPS
$0.77
Three months ended March 31, 2026; 65% increase year over year
Q3 2026 Operating Margin
13.4%
Operating income $79.4M on $592.6M sales; up from 9.1%
FY 2026 Sales Outlook
$2.33–$2.35B
Updated full-year fiscal 2026 sales expectation
FY 2026 Adjusted EPS Outlook
$3.75–$4.00
Updated full-year fiscal 2026 adjusted EPS range
YTD Free Operating Cash Flow
$17.7M
Nine months ended March 31, 2026; down from $62.7M
Quarterly Dividend
$0.20/share
Cash dividend payable May 26, 2026 to holders of record May 12, 2026
Key Terms
adjusted operating income, organic sales growth, Free operating cash flow (FOCF), non-GAAP financial measures, +1 more
5 terms
adjusted operating income financial
"Adjusted operating income was $82 million, or 13.8 percent margin, in the current quarter"
Adjusted operating income is a company's profit from its main activities, excluding certain one-time or unusual costs and gains. It helps investors see how well the business is performing in its normal operations, without distractions from rare events or expenses. This way, they get a clearer picture of the company’s true profitability.
organic sales growth financial
"reflecting organic sales growth of 19 percent and a favorable currency exchange effect of 5 percent"
Organic sales growth measures how much a company’s revenue rises from its regular business activity — like selling more products, charging higher prices, or selling to more customers — without counting money from buying other businesses or one-time currency effects. Investors watch it because it shows whether demand and the company’s core operations are genuinely getting stronger, similar to judging a garden by how much the plants you planted yourself are growing rather than by adding bought potted plants.
Free operating cash flow (FOCF) financial
"Year-to-date free operating cash flow (FOCF) was $18 million compared to $63 million in the prior year period."
non-GAAP financial measures financial
"This earnings release contains non-GAAP financial measures. Reconciliations and descriptions of all non-GAAP financial measures are set forth"
Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.
Inflation Reduction Act regulatory
"the net effect of approximately $8 million from a normalized advanced manufacturing production credit under the Inflation Reduction Act in the current quarter"
The inflation reduction act is a law designed to lower the overall increase in prices for goods and services in an economy, helping to keep the cost of living more stable. For investors, it matters because reducing inflation can lead to a healthier economy, potentially making investments safer and more predictable by preventing prices from rising too quickly.
Earnings Snapshot
Revenue: $592.6M · Guidance included
Q3 fiscal 2026
Revenue
$592.6M
up 22% year over year
Diluted EPS
$0.75
up 85% year over year
Adjusted EPS
$0.77
up 65% year over year
Operating Margin
13.4%
up from 9.1% in prior-year quarter
Organic Sales Growth
19%
Q3 fiscal 2026 vs prior-year quarter
Guidance
For full fiscal 2026, the company expects sales of $2.33–$2.35 billion and adjusted EPS of $3.75–$4.00.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 6, 2026
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |||||||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | ||||||||||||||||
Registrant’s telephone number, including area code: (412 ) 248-8000
(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Item 2.02 Results of Operations and Financial Condition.
On May 6, 2026, Kennametal Inc. (Kennametal or the Company) issued an earnings announcement for its fiscal 2026 third quarter ended March 31, 2026. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference into this Item 2.02.
The earnings announcement issued on May 6, 2026 is being furnished as Exhibit 99.1 to this Current Report on Form 8-K and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section unless the Company specifically incorporates it by reference in a document filed under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
99.1 Fiscal 2026 Third Quarter Earnings Announcement
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| KENNAMETAL INC. | |||||||||||||||||||||||||||||
| Date: | May 6, 2026 | By: | /s/ John W. Witt | ||||||||||||||||||||||||||
| John W. Witt | |||||||||||||||||||||||||||||
| Vice President Finance and Corporate Controller | |||||||||||||||||||||||||||||
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Exhibit 99.1
FOR IMMEDIATE RELEASE:
DATE: May 6, 2026
| Investor Relations | Media Relations | ||||
| CONTACT: Michael Pici | CONTACT: Lori Lecker | ||||
| PHONE: 412-790-0792 | PHONE: 412-248-8224 | ||||
| michael.pici@kennametal.com | lori.lecker@kennametal.com | ||||
Kennametal Announces Fiscal 2026 Third Quarter Results
•Sales of $593 million increased 22 percent and 19 percent on a reported and organic basis, respectively
•Operating income of $79 million and adjusted operating income of $82 million, up 80 percent and 64 percent, respectively
•Earnings per diluted share (EPS) of $0.75 and adjusted EPS of $0.77, up 85 percent and 65 percent, respectively
•Company raises annual sales and adjusted EPS Outlook
PITTSBURGH, (May 6, 2026) – Kennametal Inc. (NYSE: KMT) (the "Company") today reported results for its fiscal 2026 third quarter ended March 31, 2026.
“Our third quarter results exceeded the high end of our sales and adjusted EPS Outlook, primarily due to the unprecedented rise in tungsten pricing and stronger volume,” said Sanjay Chowbey, President and CEO.
Chowbey added: “Our team is advancing volume momentum from improving end markets, pursuing share gains through growth initiatives, and executing on opportunities in a dynamic tungsten market. Additionally, we are actively managing our tungsten supply chain and executing our strategy to drive long-term shareholder value.”
Fiscal 2026 Third Quarter Financial Highlights
Sales of $593 million increased 22 percent from $486 million in the prior year quarter, reflecting organic sales growth of 19 percent and a favorable currency exchange effect of 5 percent, partially offset by a divestiture effect of 2 percent.
Operating income was $79 million, or 13.4 percent margin, compared to $44 million, or 9.1 percent margin, in the prior year quarter. The increase in operating income was driven by the favorable timing of pricing compared to raw material costs of approximately $39 million within the Infrastructure segment, pricing and tariff surcharges within the Metal Cutting segment, higher sales and production volumes, incremental year-over-year restructuring savings of approximately $7 million, favorable foreign currency exchange of approximately $4 million and a decrease in restructuring and related charges of approximately $3 million. These factors were partially offset by higher compensation costs, tariffs and general inflation, the net effect of approximately $8 million from a normalized advanced manufacturing production credit under the Inflation Reduction Act in the current quarter within the Infrastructure segment, and higher raw material costs in the Metal Cutting segment. Adjusted operating income was $82 million, or 13.8 percent margin, in the current quarter, compared to $50 million, or 10.3 percent margin, in the prior year quarter.
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Year-to-date net cash flow from operating activities was $70 million compared to $130 million in the prior year period. The change in net cash flow from operating activities was driven primarily by working capital changes including an increase in inventory largely due to the unprecedented rise in tungsten prices, partially offset by higher net income in the current year period. Year-to-date free operating cash flow (FOCF) was $18 million compared to $63 million in the prior year period. The decrease in FOCF was driven primarily by working capital changes including an increase in inventory, partially offset by higher net income and lower net capital expenditures in the current year period.
Outlook
The Company’s expectations for sales and adjusted EPS for the full fiscal year 2026 are as follows:
•Sales expected to be $2.33 - $2.35 billion
•Adjusted EPS is expected to be $3.75 - $4.00
The Company will provide more details regarding its Outlook during its quarterly earnings conference call.
Segment Results
Metal Cutting sales of $358 million increased 18 percent from $304 million in the prior year quarter, reflecting organic sales growth of 12 percent and a favorable currency exchange effect of 6 percent. Operating income was $38 million, or 10.7 percent margin, compared to $25 million, or 8.2 percent margin, in the prior year quarter. The increase in operating income was driven by pricing and tariff surcharges, higher sales and production volumes, incremental year-over-year restructuring savings of approximately $5 million, favorable foreign currency exchange of approximately $3 million and a decrease in restructuring and related charges of approximately $2 million. These factors were partially offset by higher compensation costs, tariffs and general inflation and higher raw material costs. Adjusted operating income was $40 million, or 11.2 percent margin, in the current quarter, compared to $29 million, or 9.6 percent margin, in the prior year quarter.
Infrastructure sales of $235 million increased 29 percent from $182 million in the prior year quarter, reflecting organic sales growth of 30 percent and a favorable currency exchange effect of 4 percent, partially offset by a divestiture effect of 5 percent. Operating income was $42 million, or 18.1 percent margin, compared to $19 million, or 10.7 percent margin, in the prior year quarter. The increase in operating income was driven by the favorable timing of pricing compared to raw material costs of approximately $39 million and incremental year-over-year restructuring savings of approximately $2 million. These factors were partially offset by the net effect of approximately $8 million from a normalized advanced manufacturing production credit under the Inflation Reduction Act in the current quarter, higher compensation costs and general inflation. Adjusted operating income was $43 million, or 18.3 percent margin, in the current quarter, compared to $21 million, or 11.5 percent margin, in the prior year quarter.
Dividend Declared
Kennametal announced that its Board of Directors declared a quarterly cash dividend of $0.20 per share. The dividend is payable on May 26, 2026 to shareholders of record as of the close of business on May 12, 2026.
Conference Call and Webcast
The Company will host a conference call to discuss its third quarter fiscal 2026 results on Wednesday, May 6, 2026 at 9:30 a.m. Eastern Time. The conference call will be broadcast via real-time audio on Kennametal’s investor relations website at https://investors.kennametal.com/ - click “Event” (located in the blue Quarterly Earnings block).
This earnings release contains non-GAAP financial measures. Reconciliations and descriptions of all non-GAAP financial measures are set forth in the tables that follow.
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Certain statements in this release may be forward-looking in nature, or “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements that do not relate strictly to historical or current facts. For example, statements about Kennametal’s outlook for sales and adjusted EPS for the full year of fiscal 2026 and our expectations regarding future growth and financial performance are forward-looking statements. Any forward-looking statements are based on current knowledge, expectations and estimates that involve inherent risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, our actual results could vary materially from our current expectations. There are a number of factors that could cause our actual results to differ from those indicated in the forward-looking statements. They include: uncertainties related to changes in macroeconomic and/or global conditions, including as a result of increased inflation, tariffs, and Russia's invasion of Ukraine and the resulting sanctions on Russia; the conflicts in the Middle East; other economic recession; our ability to achieve all anticipated benefits of restructuring initiatives; Commercial Excellence growth initiatives, Operational Excellence initiatives, our foreign operations and international markets, such as currency exchange rates, different regulatory environments, trade barriers, exchange controls, and social and political instability, including the conflicts in Ukraine and the Middle East; changes in the regulatory environment in which we operate, including environmental, health and safety regulations; potential for future goodwill and other intangible asset impairment charges; our ability to protect and defend our intellectual property; continuity of information technology infrastructure; competition; our ability to retain our management and employees; demands on management resources; availability and cost of the raw materials we use to manufacture our products, including tungsten; product liability claims; integrating acquisitions and achieving the expected savings and synergies; global or regional catastrophic events; demand for and market acceptance of our products; business divestitures; energy costs; commodity prices; labor relations; and implementation of environmental remediation matters. Many of these risks and other risks are more fully described in Kennametal’s latest annual report on Form 10-K and its other periodic filings with the Securities and Exchange Commission. We can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. We undertake no obligation to release publicly any revisions to forward-looking statements as a result of future events or developments.
About Kennametal
With over 85 years as an industrial technology leader, Kennametal Inc. delivers productivity to customers through materials science, tooling and wear-resistant solutions. Customers across aerospace and defense, earthworks, energy, general engineering and transportation turn to Kennametal to help them manufacture with precision and efficiency. Every day approximately 8,100 employees are helping customers in nearly 100 countries stay competitive. Kennametal generated $2 billion in revenues in fiscal 2025. Learn more at www.kennametal.com. Follow @Kennametal: Instagram, Facebook, LinkedIn and YouTube.
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FINANCIAL HIGHLIGHTS
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||
| (in thousands, except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||
| Sales | $ | 592,585 | $ | 486,399 | $ | 1,620,084 | $ | 1,450,398 | ||||||||||||
| Cost of goods sold | 384,607 | 330,034 | 1,083,686 | 997,993 | ||||||||||||||||
Gross profit | 207,978 | 156,365 | 536,398 | 452,405 | ||||||||||||||||
| Operating expense | 124,046 | 104,013 | 353,377 | 324,975 | ||||||||||||||||
| Restructuring and other charges, net | 2,115 | 5,589 | 6,232 | 7,535 | ||||||||||||||||
| Amortization of intangibles | 2,387 | 2,703 | 7,138 | 8,142 | ||||||||||||||||
Operating income | 79,430 | 44,060 | 169,651 | 111,753 | ||||||||||||||||
| Interest expense | 6,264 | 6,213 | 18,539 | 18,705 | ||||||||||||||||
| Other income, net | (6,546) | (5,454) | (10,964) | (8,589) | ||||||||||||||||
| Income before income taxes | 79,712 | 43,301 | 162,076 | 101,637 | ||||||||||||||||
| Provision for income taxes | 18,589 | 10,219 | 41,124 | 26,052 | ||||||||||||||||
| Net income | 61,123 | 33,082 | 120,952 | 75,585 | ||||||||||||||||
| Less: Net income attributable to noncontrolling interests | 2,894 | 1,600 | 5,540 | 4,052 | ||||||||||||||||
| Net income attributable to Kennametal | $ | 58,229 | $ | 31,482 | $ | 115,412 | $ | 71,533 | ||||||||||||
| PER SHARE DATA ATTRIBUTABLE TO KENNAMETAL SHAREHOLDERS | ||||||||||||||||||||
| Basic earnings per share | $ | 0.76 | $ | 0.41 | $ | 1.51 | $ | 0.92 | ||||||||||||
| Diluted earnings per share | $ | 0.75 | $ | 0.41 | $ | 1.49 | $ | 0.91 | ||||||||||||
| Basic weighted average shares outstanding | 76,264 | 77,037 | 76,195 | 77,614 | ||||||||||||||||
| Diluted weighted average shares outstanding | 77,758 | 77,651 | 77,231 | 78,208 | ||||||||||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| (in thousands) | March 31, 2026 | June 30, 2025 | |||||||||
ASSETS | |||||||||||
| Cash and cash equivalents | $ | 106,850 | $ | 140,540 | |||||||
| Accounts receivable, net | 334,429 | 295,401 | |||||||||
| Inventories | 747,346 | 538,237 | |||||||||
| Other current assets | 89,452 | 65,092 | |||||||||
| Total current assets | 1,278,077 | 1,039,270 | |||||||||
| Property, plant and equipment, net | 857,911 | 919,914 | |||||||||
| Goodwill and other intangible assets, net | 340,231 | 349,935 | |||||||||
| Other assets | 254,528 | 236,293 | |||||||||
| Total assets | $ | 2,730,747 | $ | 2,545,412 | |||||||
LIABILITIES | |||||||||||
| Revolving and other lines of credit and notes payable | $ | 16,750 | $ | 977 | |||||||
| Accounts payable | 263,068 | 195,929 | |||||||||
| Other current liabilities | 256,251 | 225,423 | |||||||||
| Total current liabilities | 536,069 | 422,329 | |||||||||
| Long-term debt | 597,394 | 596,788 | |||||||||
| Other liabilities | 198,912 | 201,647 | |||||||||
| Total liabilities | 1,332,375 | 1,220,764 | |||||||||
| KENNAMETAL SHAREHOLDERS’ EQUITY | 1,354,734 | 1,283,979 | |||||||||
| NONCONTROLLING INTERESTS | 43,638 | 40,669 | |||||||||
| Total liabilities and equity | $ | 2,730,747 | $ | 2,545,412 | |||||||
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
| Nine Months Ended March 31, | |||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| OPERATING ACTIVITIES | |||||||||||
| Net income | $ | 120,952 | $ | 75,585 | |||||||
| Adjustments to reconcile to cash from operations: | |||||||||||
| Depreciation | 100,441 | 93,279 | |||||||||
| Amortization | 7,138 | 8,142 | |||||||||
| Stock-based compensation expense | 26,015 | 18,329 | |||||||||
| Restructuring and other charges, net | 6,232 | 7,535 | |||||||||
| Deferred income taxes | (2,394) | (1,917) | |||||||||
| Gain on insurance recoveries | — | (7,500) | |||||||||
| Other | 1,976 | 817 | |||||||||
| Changes in certain assets and liabilities: | |||||||||||
| Accounts receivable | (42,512) | 10,516 | |||||||||
| Inventories | (215,973) | (41,269) | |||||||||
| Other current assets | (25,328) | (1,398) | |||||||||
| Accounts payable and accrued liabilities | 101,717 | (14,140) | |||||||||
| Accrued income taxes | 2,723 | (11,668) | |||||||||
| Accrued pension and postretirement benefits | (840) | (5,023) | |||||||||
| Other | (10,466) | (1,558) | |||||||||
| Net cash flow provided by operating activities | 69,681 | 129,730 | |||||||||
| INVESTING ACTIVITIES | |||||||||||
| Purchases of property, plant and equipment | (53,680) | (67,506) | |||||||||
| Disposals of property, plant and equipment | 1,662 | 460 | |||||||||
| Proceeds from insurance recoveries | — | 7,193 | |||||||||
| Other | 391 | (202) | |||||||||
| Net cash flow used in investing activities | (51,627) | (60,055) | |||||||||
| FINANCING ACTIVITIES | |||||||||||
| Net increase in notes payable | 360 | 944 | |||||||||
| Net increase in revolving and other lines of credit | 15,300 | 10,200 | |||||||||
| Purchase of capital stock | (10,068) | (55,081) | |||||||||
| The effect of employee benefit and stock plans and dividend reinvestment | (7,954) | (6,570) | |||||||||
| Cash dividends paid to Shareholders | (45,605) | (46,604) | |||||||||
| Other | (2,181) | (915) | |||||||||
| Net cash flow used in financing activities | (50,148) | (98,026) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | (1,596) | (2,153) | |||||||||
| CASH AND CASH EQUIVALENTS | |||||||||||
| Net decrease in cash and cash equivalents | (33,690) | (30,504) | |||||||||
| Cash and cash equivalents, beginning of period | 140,540 | 127,971 | |||||||||
| Cash and cash equivalents, end of period | $ | 106,850 | $ | 97,467 | |||||||
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| SEGMENT DATA (UNAUDITED) | Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||
| Sales: | ||||||||||||||||||||
| Metal Cutting | $ | 357,907 | $ | 304,349 | $ | 999,591 | $ | 899,035 | ||||||||||||
| Infrastructure | 234,678 | 182,050 | 620,493 | 551,363 | ||||||||||||||||
| Total sales | $ | 592,585 | $ | 486,399 | $ | 1,620,084 | $ | 1,450,398 | ||||||||||||
| Sales By Geographic Region: | ||||||||||||||||||||
| Americas | $ | 298,272 | $ | 240,361 | $ | 811,035 | $ | 713,341 | ||||||||||||
| EMEA | 173,991 | 151,262 | 483,553 | 442,689 | ||||||||||||||||
| Asia Pacific | 120,322 | 94,776 | 325,496 | 294,368 | ||||||||||||||||
| Total sales | $ | 592,585 | $ | 486,399 | $ | 1,620,084 | $ | 1,450,398 | ||||||||||||
| Operating income: | ||||||||||||||||||||
| Metal Cutting | $ | 38,125 | $ | 24,900 | $ | 89,447 | $ | 65,308 | ||||||||||||
| Infrastructure | 42,471 | 19,423 | 82,512 | 47,770 | ||||||||||||||||
Corporate (1) | (1,166) | (263) | (2,308) | (1,325) | ||||||||||||||||
| Total operating income | $ | 79,430 | $ | 44,060 | $ | 169,651 | $ | 111,753 | ||||||||||||
(1) Represents unallocated corporate expenses.
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NON-GAAP RECONCILIATIONS (UNAUDITED)
In addition to reported results under generally accepted accounting principles in the United States of America (GAAP), the following financial highlight tables include, where appropriate, a reconciliation of adjusted results including: operating income and margin; net income attributable to Kennametal; diluted EPS; Metal Cutting operating income and margin; Infrastructure operating income and margin; FOCF; and consolidated and segment organic sales growth (all of which are non-GAAP financial measures), to the most directly comparable GAAP financial measures. Adjustments for the three months ended March 31, 2026 include restructuring and related charges and differences in projected annual tax rates. Adjustments for the three months ended March 31, 2025 include restructuring and related charges and differences in projected annual tax rates. For those adjustments that are presented ‘net of tax’, the tax effect of the adjustment can be derived by calculating the difference between the pre-tax and the post-tax adjustments presented. The tax effect on adjustments is calculated by preparing an overall tax calculation including the adjustments and then a tax calculation excluding the adjustments. The difference between these calculations results in the tax impact of the adjustments.
Management believes that presentation of these non-GAAP financial measures provides useful information about the results of operations of the Company for the current and past periods. Management believes that investors should have available the same information that management uses to assess operating performance, determine compensation and assess the capital structure of the Company. These non-GAAP financial measures should not be considered in isolation or as a substitute for the most comparable GAAP financial measures. Investors are cautioned that non-GAAP financial measures used by management may not be comparable to non-GAAP financial measures used by other companies. Reconciliations and descriptions of all non-GAAP financial measures are set forth in the disclosures below.
Reconciliations to the most directly comparable GAAP financial measures for the following forward-looking non-GAAP financial measures for the full fiscal year of 2026 have not been provided, including but not limited to, adjusted EPS. The most comparable GAAP financial measure is diluted EPS. Because the non-GAAP financial measures on a forward-looking basis are subject to uncertainty and variability as they are dependent on many factors - including, but not limited to, the effect of foreign currency exchange fluctuations, impacts from potential acquisitions or divestitures, gains or losses on the potential sale of businesses or other assets, restructuring costs, asset impairment charges, gains or losses from early extinguishment of debt, the tax impact of the items above and the impact of tax law changes or other tax matters - reconciliations to the most directly comparable forward-looking GAAP financial measures are not available without unreasonable effort.
| THREE MONTHS ENDED MARCH 31, 2026 (UNAUDITED) | ||||||||||||||
| (in thousands, except percents and per share data) | Sales | Operating income | Net income(2) | Diluted EPS | ||||||||||
| Reported results | $ | 592,585 | $ | 79,430 | $ | 58,229 | $ | 0.75 | ||||||
| Reported operating margin | 13.4 | % | ||||||||||||
| Restructuring and related charges | — | 2,391 | 1,976 | 0.02 | ||||||||||
| Differences in projected annual tax rates | — | — | 30 | — | ||||||||||
| Adjusted results | $ | 592,585 | $ | 81,821 | $ | 60,235 | $ | 0.77 | ||||||
| Adjusted operating margin | 13.8 | % | ||||||||||||
(2) Attributable to Kennametal.
| THREE MONTHS ENDED MARCH 31, 2026 (UNAUDITED) | ||||||||||||||
| Metal Cutting | Infrastructure | |||||||||||||
| (in thousands, except percents) | Sales | Operating income | Sales | Operating income | ||||||||||
| Reported results | $ | 357,907 | $ | 38,125 | $ | 234,678 | $ | 42,471 | ||||||
| Reported operating margin | 10.7 | % | 18.1 | % | ||||||||||
| Restructuring and related charges | — | 1,948 | — | 443 | ||||||||||
| Adjusted results | $ | 357,907 | $ | 40,073 | $ | 234,678 | $ | 42,914 | ||||||
| Adjusted operating margin | 11.2 | % | 18.3 | % | ||||||||||
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| THREE MONTHS ENDED MARCH 31, 2025 (UNAUDITED) | ||||||||||||||
| (in thousands, except percents and per share data) | Sales | Operating income | Net income(2) | Diluted EPS | ||||||||||
| Reported results | $ | 486,399 | $ | 44,060 | $ | 31,482 | $ | 0.41 | ||||||
| Reported operating margin | 9.1 | % | ||||||||||||
| Restructuring and related charges | — | 5,840 | 4,709 | 0.06 | ||||||||||
| Differences in projected annual tax rates | — | — | 146 | — | ||||||||||
| Adjusted results | $ | 486,399 | $ | 49,900 | $ | 36,337 | $ | 0.47 | ||||||
| Adjusted operating margin | 10.3 | % | ||||||||||||
(2) Attributable to Kennametal.
| THREE MONTHS ENDED MARCH 31, 2025 (UNAUDITED) | ||||||||||||||
| Metal Cutting | Infrastructure | |||||||||||||
| (in thousands, except percents) | Sales | Operating income | Sales | Operating income | ||||||||||
| Reported results | $ | 304,349 | $ | 24,900 | $ | 182,050 | $ | 19,423 | ||||||
| Reported operating margin | 8.2 | % | 10.7 | % | ||||||||||
| Restructuring and related charges | — | 4,320 | — | 1,520 | ||||||||||
| Adjusted results | $ | 304,349 | $ | 29,220 | $ | 182,050 | $ | 20,943 | ||||||
| Adjusted operating margin | 9.6 | % | 11.5 | % | ||||||||||
Free Operating Cash Flow (FOCF)
FOCF is a non-GAAP financial measure and is defined by the Company as net cash flow provided by operating activities (which is the most directly comparable GAAP financial measure) less capital expenditures plus proceeds from disposals of fixed assets. Management considers FOCF to be an important indicator of the Company's cash generating capability because it better represents cash generated from operations that can be used for dividends, debt repayment, strategic initiatives (such as acquisitions) and other investing and financing activities.
| FREE OPERATING CASH FLOW (UNAUDITED) | Nine Months Ended March 31, | |||||||||||||
| (in thousands) | 2026 | 2025 | ||||||||||||
| Net cash flow provided by operating activities | $ | 69,681 | $ | 129,730 | ||||||||||
| Purchases of property, plant and equipment | (53,680) | (67,506) | ||||||||||||
| Disposals of property, plant and equipment | 1,662 | 460 | ||||||||||||
| Free operating cash flow | $ | 17,663 | $ | 62,684 | ||||||||||
9
Organic Sales Growth
Organic sales growth is a non-GAAP financial measure of sales growth (which is the most directly comparable GAAP measure) excluding the effects of acquisitions, divestitures, business days and foreign currency exchange from year-over-year comparisons. Management believes this measure provides investors with a supplemental understanding of underlying sales trends by providing sales growth on a consistent basis. Management reports organic sales growth at the consolidated and segment levels.
| ORGANIC SALES GROWTH (UNAUDITED) | ||||||||||||||||||||
| Three Months Ended March 31, 2026 | Metal Cutting | Infrastructure | Total | |||||||||||||||||
| Organic sales growth | 12% | 30% | 19% | |||||||||||||||||
Foreign currency exchange effect (3) | 6 | 4 | 5 | |||||||||||||||||
Business days effect (4) | — | — | — | |||||||||||||||||
Divestiture effect (5) | — | (5) | (2) | |||||||||||||||||
| Sales growth | 18% | 29% | 22% | |||||||||||||||||
(3) Foreign currency exchange effect is calculated by dividing the difference between current period sales and current period sales at prior period foreign exchange rates by prior period sales.
(4) Business days effect is calculated by dividing the year-over-year change in weighted average working days (based on mix of sales by country) by prior period weighted average working days.
(5) Divestiture effect is calculated by dividing prior period sales attributable to divested businesses by prior period sales.
10
FAQ
How did Kennametal (KMT) perform in its fiscal 2026 third quarter?
Kennametal reported strong Q3 2026 results with sales of $592.6 million, up 22% year over year. Operating income increased to $79.4 million and diluted EPS rose to $0.75, reflecting improved margins and benefits from higher tungsten pricing and volumes.
What guidance did Kennametal (KMT) give for full-year fiscal 2026?
Kennametal raised its full-year fiscal 2026 outlook, now expecting sales of $2.33–$2.35 billion and adjusted EPS of $3.75–$4.00. This updated guidance reflects stronger-than-expected Q3 performance and the impact of higher tungsten pricing and demand trends.
How did Kennametal’s Metal Cutting and Infrastructure segments perform in Q3 2026?
In Q3 2026, Metal Cutting sales were $357.9 million, up 18%, with adjusted operating margin of 11.2%. Infrastructure sales reached $234.7 million, up 29%, and adjusted operating margin improved to 18.3%, aided by favorable tungsten pricing and restructuring savings.
What happened to Kennametal (KMT) cash flow and free operating cash flow year-to-date?
Year-to-date net cash flow from operating activities was $69.7 million, down from $129.7 million in the prior-year period. Free operating cash flow declined to $17.7 million, primarily due to higher inventory levels linked to the unprecedented rise in tungsten prices.
Did Kennametal (KMT) declare a dividend with its Q3 2026 results?
Yes. Kennametal’s Board declared a quarterly cash dividend of $0.20 per share. The dividend is payable on May 26, 2026 to shareholders of record as of the close of business on May 12, 2026, continuing the company’s cash return to shareholders.
What is driving Kennametal’s recent sales growth and margin expansion?
Kennametal’s Q3 2026 results benefited from organic sales growth of 19%, favorable timing of pricing versus raw material costs, especially tungsten, and higher volumes. Restructuring savings and tariff surcharges also supported operating margin expansion to 13.4% from 9.1% a year earlier.