Industrial technology leader Kennametal Inc. (KMT.N) on Wednesday reported second-quarter earnings that nearly doubled from the previous year, prompting the company to raise its full-year sales and adjusted earnings guidance. The Pittsburgh-based company, which provides tooling and wear-resistant solutions to industries ranging from aerospace to energy, saw its shares buoyed by results that exceeded the high end of its previous outlook. Performance was driven by a combination of higher sales volumes, strategic pricing, and customer “buy-ahead” activity in response to the current tungsten pricing environment.
Financial Performance
For the fiscal second quarter ended Dec. 31, 2025, Kennametal reported sales of $530 million, a 10% increase on both a reported and organic basis compared to $482 million in the prior-year period.
Net income attributable to Kennametal rose to $33.9 million, or $0.44 per diluted share, up from $17.9 million, or $0.23 per share a year earlier. On an adjusted basis, earnings per share reached $0.47, representing an 89% year-over-year increase. We are pleased with our second quarter results driven by volume in the quarter, largely from buy-ahead in response to the tungsten pricing environment and modest improvement in certain end markets.
Segment Results and Margins
The company’s Metal Cutting segment saw sales grow 11% to $331 million, supported by strength in the Aerospace & Defense and Energy sectors. Adjusted operating margins for the segment expanded 360 basis points to 9.6%, aided by restructuring savings of approximately $6 million and tariff surcharges.
In the Infrastructure segment, sales rose 8% to $198 million. Operating income for this division was significantly boosted by a $17 million favorable timing effect where pricing gains outpaced raw material costs.
Cash Flow and Dividends
While net income improved, year-to-date net cash flow from operating activities fell to $73 million from $101 million in the prior year, primarily due to increased inventory levels. Free operating cash flow was $38 million for the first half of the year.
The company’s board declared a quarterly cash dividend of $0.20 per share, payable on Feb. 24, 2026.
Kennametal continues to execute its restructuring initiatives, noting it is on track to deliver $30 million in total restructuring savings for the fiscal year.At the end of the quarter, the company maintained a strong liquidity position with $129 million in cash and cash equivalents.
Raised Outlook
Citing stable market conditions and pricing realization, Kennametal updated its fiscal 2026 annual outlook:
- Full-year sales are now expected between $2.190 billion and $2.250 billion.
- Adjusted EPS is projected at $2.05 to $2.45.
- For the third quarter, the company expects sales of $545 million to $565 million and adjusted EPS of $0.50 to $0.60.
