Core Insights - Kennametal Inc. (KMT) reported adjusted earnings of 47 cents per share for Q2 FY26, exceeding the Zacks Consensus Estimate of 35 cents, marking an 89% increase year-over-year [1] - The company generated revenues of $530 million, a 10% increase from the previous year, surpassing the Zacks Consensus Estimate of $516.1 million [2] Revenue Details - Revenues from American operations rose 13% year-over-year to $265.2 million, while Europe, the Middle East, and Africa contributed $156.3 million, up 7%, and Asia Pacific sales increased 7% to $108.1 million [3] - The Metal Cutting segment reported revenues of $331.1 million, an 11% increase year-over-year, with organic revenues growing 9% [3] - The Infrastructure segment's revenues totaled $198.5 million, up 8% year-over-year, with organic revenues increasing 11% [4] Margin Profile - Cost of goods sold increased by 5.5% year-over-year to $355.7 million, while gross profit rose 19.9% to $173.9 million, resulting in a gross margin of 32.8% [5] - Operating income increased 66.3% year-over-year to $52.7 million, with an operating margin of 9.9%, up 330 basis points [6] Balance Sheet and Cash Flow - Cash and cash equivalents at the end of Q2 FY26 were $129.3 million, down from $140.5 million at the end of FY25, while long-term debt slightly increased to $597.2 million [7] - Net cash generated from operating activities in the first six months of FY26 was $72.6 million, compared to $100.9 million in the same period last year [8] Dividend and Guidance - The board approved a quarterly cash dividend of 20 cents per share, payable on February 24, 2026 [11] - The updated fiscal 2026 outlook projects sales between $2.19 billion and $2.25 billion, with adjusted EPS expected to be in the range of $2.05 to $2.45 [12] Future Expectations - For Q3 FY26, sales are anticipated to be between $545 million and $565 million, with adjusted EPS expected in the range of 50 to 60 cents [13]

Core Viewpoint - Kennametal reported strong fiscal second-quarter results for 2026, driven by higher sales volumes, pricing actions related to high tungsten costs, and restructuring savings, leading to improved profitability metrics [4][7]. Financial Performance - The company achieved an adjusted EBITDA margin of 17.1%, up from 13.9% year-over-year, and adjusted EPS increased to $0.47 from $0.25 [1][7]. - Organic sales growth was reported at 10% year-over-year, marking the second consecutive quarter of organic growth [2][7]. - Management raised fiscal 2026 sales guidance to $2.19–2.25 billion and adjusted EPS to $2.05–2.45, with Q3 sales expected between $545–565 million and EPS between $0.50–0.60 [5][19]. Market Dynamics - The company noted that tungsten prices have increased approximately 33% year-to-date, impacting working capital and inventory levels [6][12]. - Customer buy-ahead contributed significantly to sales, with Metal Cutting generating about $10 million tied to this effect [11]. Segment Performance - Sales growth was led by Infrastructure (+11%) and Metal Cutting (+9%), with total sales rising 10% year-over-year [8][10]. - By end market, aerospace and defense grew 23%, earthworks rose 18%, and general engineering increased 8% [9]. Strategic Outlook - The company highlighted power generation and electricity demand as a multi-year growth opportunity, projecting a 3% annual growth in electricity demand through 2030 [15]. - Kennametal is positioned to capitalize on trends in gas turbines and combustion engines, with projected growth rates of 15% and 10% CAGR, respectively [16]. Cash Flow and Capital Management - Year-to-date free operating cash flow decreased to $38 million from $57 million, primarily due to working capital changes related to higher tungsten prices [17]. - The company returned $15 million through dividends but paused share repurchases due to increased working capital needs [18].

Core Viewpoint - Kennametal's shares increased by up to 14.4% following the release of positive second-quarter earnings, indicating stronger-than-expected sales and earnings growth [1][3]. Group 1: Earnings Performance - Kennametal exceeded expectations with a 10% year-over-year sales growth, attributed to higher sales volume, as noted by CEO Sanjay Chowbey [3]. - The company generates 46% of its revenue from the general engineering market, with additional contributions from transportation, aerospace & defense, energy, and earthworks [2]. Group 2: Market Dynamics - The sales growth was not solely due to price increases; however, there was a noted impact from customers purchasing ahead of price hikes due to record-high tungsten prices [4]. - The aerospace & defense markets are expected to improve in 2026, driven by a better outlook for aircraft production, while energy exposure presents growth opportunities as electricity demand rises [5]. Group 3: Industry Outlook - The recent improvement in the Institute for Supply Management's Purchasing Managers Index suggests potential growth in the U.S. manufacturing sector after a year of declines, although Kennametal's earnings report does not confirm a definitive turnaround [6].

Core Viewpoint - Credit Corp aims to lead in the credit impaired consumer segment, focusing on consumers with previous credit difficulties and emphasizing responsible operations and compliance [1] Group 1: Business Strategy and Objectives - The company targets strong earnings growth with a defined return on equity of 16% while maintaining a conservative capital structure [2] - Credit Corp operates in a complex environment requiring specialized approaches to manage customers facing hardship, which necessitates strong operational capabilities [1] Group 2: Financial Performance - In the first half of the year, Credit Corp's net profit after tax remained flat at $44.1 million compared to the previous year, attributed to upfront loss provisioning and marketing costs associated with asset growth [2] - Despite the flat profit, both the loan book and purchased debt ledger book showed growth compared to the prior year, indicating positive investment metrics [2]

Financial Performance - Sales for the three months ended December 31, 2025, increased to $529.5 million, up 9.8% from $482.1 million in the same period of 2024[14] - Gross profit for the six months ended December 31, 2025, rose to $328.4 million, compared to $296.0 million in 2024, reflecting a 10.9% increase[14] - Operating income for the three months ended December 31, 2025, was $52.7 million, a significant increase of 66.3% from $31.7 million in 2024[14] - Net income attributable to Kennametal for the six months ended December 31, 2025, was $57.2 million, compared to $40.1 million in 2024, representing a 42.7% increase[14] - Basic earnings per share for the three months ended December 31, 2025, increased to $0.44, up from $0.23 in the same period of 2024[14] - Net income for the six months ended December 31, 2025, was $59,829,000, compared to $42,503,000 for the same period in 2024, reflecting a year-over-year increase of 40.8%[59] - The total comprehensive income for the six months ended December 31, 2025, was $64,908,000, compared to a total comprehensive loss of $15,214,000 in 2024[62] Assets and Liabilities - Total assets as of December 31, 2025, were $2.6 billion, an increase from $2.5 billion as of June 30, 2025[16] - Total liabilities as of December 31, 2025, were $1.2 billion, compared to $1.2 billion as of June 30, 2025, showing a slight increase[16] - The company reported a total asset value of $2,595,556,000 as of December 31, 2025, compared to $2,435,805,000 a year earlier, indicating a year-over-year increase of 6.6%[67] - The balance of goodwill as of December 31, 2025, was $282,973,000, reflecting a slight increase from $282,726,000 as of June 30, 2025[63] Cash Flow and Capital Expenditures - Net cash flow provided by operating activities for the six months ended December 31, 2025, was $72.6 million, down from $100.9 million in 2024[17] - Cash and cash equivalents at the end of the period were $129.3 million, a decrease from $140.5 million at the beginning of the period[17] - Capital expenditures for the six months ended December 31, 2025, were $35.7 million, down from $44.0 million in the prior year period[78] - Cash flow used in investing activities was $33.8 million, primarily for capital expenditures[119] Equity and Shareholder Information - The total equity as of December 31, 2025, was $1.358 billion, an increase from $1.260 billion as of December 31, 2024, reflecting a growth of approximately 7.8%[58] - The balance of Kennametal shareholders' equity as of December 31, 2025, was $1,228,574,000, down from $1,179,385,000 in 2024, reflecting a decrease of about 4.1%[59] - The company repurchased $10 million of common stock during the six months ended December 31, 2025, under a $200 million share repurchase program[115] - The company has authorized a $200 million share repurchase program over three years, separate from the dividend reinvestment program[142] Segment Performance - Total sales for the Metal Cutting segment reached $331,059,000 for the three months ended December 31, 2025, an increase of 11.1% compared to $297,786,000 in the same period of 2024[66] - Infrastructure segment sales were $198,466,000 for the three months ended December 31, 2025, up 7.4% from $184,265,000 in the prior year[66] - Aerospace & Defense end market sales grew by 22% for the three months ended December 31, 2025, with significant contributions from improved build rates in the Americas[96] - For the three months ended December 31, 2025, Metal Cutting sales increased by 11% year-over-year, driven by 9% organic sales growth and a 2% favorable currency exchange effect[96] Expenses and Charges - The company recorded restructuring and related charges of $18.6 million through December 31, 2025, compared to a revised target of approximately $20 million[33] - For the three months ended December 31, 2025, the company reported restructuring charges of $3.1 million, consisting of $2.1 million in Metal Cutting and $0.9 million in Infrastructure[34] - Total depreciation and amortization expenses for the six months ended December 31, 2025, were $69,413,000, compared to $67,568,000 in the same period of 2024[67] Tax and Compliance - The effective income tax rate for the three months ended December 31, 2025, was 27.7%, down from 29.4% in the same period of 2024, primarily due to a favorable geographical mix[52] - The company maintained compliance with all covenants of its Credit Agreement, with $650 million of additional availability as of December 31, 2025[112] Other Financial Metrics - The company recorded a loss of $0.5 million related to net investment hedges for the three months ended December 31, 2025[31] - The fair market value of fixed-rate debt was $576.7 million as of December 31, 2025, compared to $570.8 million at June 30, 2025, showing a slight increase[44] - Working capital increased to $681.9 million at December 31, 2025, up by $65.0 million from $616.9 million at June 30, 2025, primarily due to an increase in inventories of $83.7 million[123]

Market Overview - The U.S. stock market is experiencing mixed trading patterns with a notable rotation out of technology giants and into broader market sectors [1] - The S&P 500 has slipped around 0.2% to 0.3%, marking a modest decline for the fourth time in the last five days [2] - The Nasdaq Composite has traded approximately 1% lower, with the Nasdaq 100 specifically seeing a 1.4% loss [2] - The Dow Jones Industrial Average has risen by as much as 389 points, or 0.8%, indicating a shift away from tech stocks towards firms expected to benefit from improving growth prospects [2] Economic Indicators - The yield on 10-year Treasuries has remained steady at 4.28% [3] - Upcoming economic data includes the ADP Employment Change and ISM Services PMI for January, which are crucial for assessing the labor market and services sector [5] - The week will culminate with the U.S. Employment Report on February 6th, which includes non-farm payrolls and average hourly earnings [6] Company-Specific Highlights - Advanced Micro Devices (AMD) shares dropped by as much as 15.7% despite stronger-than-expected profits, indicating high expectations for AI-related companies [9] - Uber Technologies (UBER) fell 3% to 5% after its quarterly results and profit forecast fell short of expectations [10] - Super Micro Computer (SMCI) rallied by 12% to 14% after delivering stronger-than-expected profits [10] - Eli Lilly (LLY) surged by 9.2% after exceeding profit expectations and providing strong guidance, driven by its obesity drugs [11] - Silicon Laboratories (SLAB) shares soared by 51% following the announcement of its acquisition by Texas Instruments for approximately $7.5 billion [13] - Nvidia (NVDA) shares declined 2.8% due to a broad tech sell-off and uncertainty surrounding its OpenAI investment [14]

Kennametal (NYSE:KMT) Q2 2026 Earnings call February 04, 2026 09:00 AM ET Company ParticipantsMichael Pici - VP of Investor RelationsPatrick Watson - CFOSanjay Chowbey - CEOConference Call ParticipantsAngel Castillo - Equity Research Analyst, U.S. Machinery & ConstructionChristian Zylstra - AnalystJulian Mitchell - Managing Director & Equity Research Analyst, U.S. IndustrialsStephen Volkmann - Equity AnalystSteven Fisher - Managing Director & Senior Equity Research AnalystTami Zakaria - AnalystOperatorGood ...

Financial Data and Key Metrics Changes - Sales increased by 10% year-over-year, with organic growth also at 10% and a favorable foreign currency exchange impact of 1% [14] - Adjusted EBITDA margin improved to 17.1% from 13.9% in the prior year quarter, while adjusted EPS rose to $0.47 from $0.25 [8][15] - The company raised its sales and EPS outlook for fiscal 2026, now expecting sales between $2.19 billion and $2.25 billion and adjusted EPS in the range of $2.05-$2.45 [24][25] Business Line Data and Key Metrics Changes - Infrastructure segment sales increased by 11% organically, while Metal Cutting sales grew by 9% [14][19] - Aerospace and Defense in Metal Cutting saw a 19% increase year-over-year, driven by improved build rates and easing supply chain pressures [17] - In the Infrastructure segment, Aerospace and Defense sales surged by 33% due to defense orders, while Earthworks grew by 18% [19] Market Data and Key Metrics Changes - Transportation market outlook improved slightly from a previous estimate of low single digits down to flat [9] - Aerospace and Defense continues to show growth, with OEM build rates improving [9] - General Engineering in the Americas showed slight improvement, while other regions remained unchanged [10][51] Company Strategy and Development Direction - The company is focusing on strategic growth initiatives, including pricing actions in response to rising tungsten costs and cost improvement measures [5][6] - Kennametal is well-positioned to capitalize on the rising global demand for electricity, with a broad range of products supporting energy generation and transmission [10][12] - The company aims to strengthen its portfolio while executing lean transformation and structural cost improvements [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to offset rising tungsten costs through pricing actions and noted a modest improvement in certain end markets [5][8] - The outlook for fiscal 2026 reflects additional pricing actions related to increasing tungsten costs, with expectations of continued organic growth [24][25] - Management highlighted the importance of maintaining a healthy balance sheet and the absence of near-term refinancing requirements [23] Other Important Information - The company realized $8 million in restructuring savings during the quarter and continues to execute plans to lower structural costs [6] - Free Operating Cash Flow decreased to $38 million from $57 million in the prior year, primarily due to working capital changes [22] Q&A Session Summary Question: Discussion on tungsten price increases and customer behavior - Management confirmed a modest price increase in January and noted that customers are buying ahead of price increases due to rising tungsten costs [31][35] Question: Concerns about tungsten supply - Management reassured that they have multiple sources for tungsten and long-term agreements in place, minimizing supply risks [39][40] Question: Volume trends and market outlook - Management indicated that volume projections have improved, with expectations for slight growth in the second half of the fiscal year [48][49] Question: Competitive dynamics in various markets - Management acknowledged competition but emphasized their core competencies in material science and application engineering as key advantages [60][61] Question: Impact of tariffs and trade agreements - Management stated that current tariffs have not significantly impacted operations and that they are prepared to adjust pricing if tariffs change [85][87]

Kennametal (NYSE:KMT) Q2 2026 Earnings call February 04, 2026 09:00 AM ET Speaker4Good morning. I would like to welcome everyone to Kennametal's second quarter and fiscal 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press Star, then the number one on your telephone keypad. If you would like to withdraw your question, plea ...

FY26 Second Quarter Earnings Call Presentation February 4, 2026 Q2 FY26 EARNINGS Safe Harbor Statement 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, adjusted operating incom ...