Kennametal (KMT) Q2 2026 earnings summary

Executive summary

• Achieved strong Q2 results with sales of $530 million, up 10% year-over-year, exceeding outlook due to higher volumes, buy-ahead activity, and favorable tungsten pricing.

• Adjusted EPS rose to $0.47, up 88% from the prior year; diluted EPS was $0.44, up 92%.

• Margin expansion driven by pricing actions, restructuring savings, and volume; adjusted EBITDA margin reached 17.1%, up from 13.9%.

• Continued progress on strategic growth initiatives, especially in power generation, and realized $8 million in restructuring savings in Q2.

• Returned $15 million to shareholders via dividends in the quarter.

Financial highlights

• Q2 sales: $530 million (up 10% year-over-year); adjusted EPS: $0.47 (up from $0.25); adjusted EBITDA: $90 million (17.1% margin).

• Gross profit increased to $174 million (32.9% margin); operating income up 68% to $56 million (10.5% margin).

• Free operating cash flow year-to-date was $38 million, down from $57 million, mainly due to higher inventory.

• Net income attributable to shareholders was $33.9 million, up from $17.9 million a year ago.

• Returned $15 million to shareholders via dividends; no share repurchases in the quarter.

Outlook and guidance

• Full-year FY26 sales guidance raised to $2.19–$2.25 billion; adjusted EPS expected at $2.05–$2.45.

• Q3 sales expected at $545–$565 million; adjusted EPS forecasted at $0.50–$0.60.

• Free operating cash flow for FY26 projected at ~60% of adjusted net income; capital spending planned at ~$90 million.

• Restructuring savings of $30 million included in FY26 guidance.

• Management expects continued benefit from pricing actions and restructuring savings, but notes ongoing risks from inflation, tariffs, and global economic uncertainty.