Kennametal Inc. has released its fiscal 2026 second-quarter results, with sales totaling $530 million, marking a 10 percent increase on both a reported and organic basis compared to the prior year quarter. Operating income saw a significant rise, reaching $53 million, a 66 percent increase, and adjusted operating income stood at $56 million, up by 68 percent. Earnings per diluted share (EPS) also showed substantial growth, reaching $0.44, a 92 percent increase, while adjusted EPS reached $0.47, up by 89 percent.
The company's year-to-date net cash flow from operating activities was reported at $73 million, a decrease from the prior year period's $101 million. This was primarily due to working capital changes, including an increase in inventory, partially offset by higher net income in the current year period. Year-to-date free operating cash flow (FOCF) decreased to $38 million from $57 million in the prior year period, primarily driven 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.
Looking ahead, Kennametal Inc. has raised its sales and adjusted EPS annual outlook. It expects sales for the third quarter of fiscal 2026 to be in the range of $545 million to $565 million, with adjusted EPS expected to be between $0.50 and $0.60. For the full year, sales are anticipated to be in the range of $2.190 billion to $2.250 billion, with adjusted EPS expected to be between $2.05 and $2.45. The company also expects free operating cash flow to be approximately 60 percent of adjusted net income, with capital spending expected to be approximately $90 million.
In terms of segment results, the metal cutting segment saw sales increase by 11 percent to $331 million, while infrastructure sales increased by 8 percent to $198 million, both compared to the prior year quarter. Operating income for metal cutting was $30 million, or 9.0 percent margin, compared to $17 million, or 5.6 percent margin, in the prior year quarter. For infrastructure, operating income reached $23 million, or 11.8 percent margin, compared to $16 million, or 8.5 percent margin, in the prior year quarter.
Finally, Kennametal Inc. declared a quarterly cash dividend of $0.20 per share, payable on February 24, 2026 to shareholders of record as of the close of business on February 10, 2026. Following these announcements, the company's shares moved -1.56%, and are now trading at a price of $34.02. For the full picture, make sure to review KENNAMETAL INC's 8-K report.
