Kennametal Inc

Hyster-Yale Materials Handling reported second-quarter revenues of $812.9 million, down 15% year on year but exceeding analysts' expectations by 1%, in what was a very strong quarter for the company with a beat of analysts' EPS estimates. The result was the slowest revenue growth among the 9 professional tools and equipment stocks tracked, a group whose revenues as a whole beat analysts' consensus estimates by 2.1% while next quarter's revenue guidance came in 14.3% above. Kennametal posted the group's best quarter, with revenues of $736.6 million, up 42.6% year on year and 1.3% ahead of expectations, alongside the fastest revenue growth and highest full-year guidance raise in the group. Lincoln Electric reported revenues of $1.22 billion, up 12% year on year and 4.6% above expectations, though it significantly missed analysts' organic revenue estimates, while Stanley Black & Decker reported revenues of $3.96 billion, flat year on year and in line with expectations, marking the weakest performance against analyst estimates of the whole group. Snap-on reported revenues of $1.33 billion, up 4.2% year on year and 1.1% above expectations. On average, shares of the group are down 9.1% since the latest earnings results; Hyster-Yale is down 9% since reporting and currently trades at $31.98.

Kennametal unveiled KAF82 on September 15, the first additive manufacturing tungsten carbide grade of its kind to reach commercial scale for metal cutting tools, arriving weeks after the company posted record profitability for fiscal 2026. Two automotive OEMs are already running production tooling built with KAF82, and Kennametal controls the entire chain from proprietary powder production through sintering and finishing, keeping the powder off the external market so rivals cannot buy the same material. The grade also uses less tungsten per part, and Kennametal is pitching it across aerospace and defense, energy, general engineering, and transportation. The launch follows fourth quarter sales that rose 43% to $737 million and record adjusted earnings per share of $2.96, capping a fiscal year with adjusted EPS of $4.57. The same fiscal year swung operating cash flow from $208 million positive to $4 million negative, and free operating cash flow from $121 million positive to $79 million negative, on working capital tied up in inventory built at unusually high tungsten prices and advance supply payments. Kennametal's guidance for the first quarter of fiscal 2027 calls for adjusted EPS of $2.50 to $2.80, with a full year range of $4.15 to $5.15.

Louis Navellier says he fully expects a key Fed interest rate hike at the September Federal Open Market Committee meeting, unless extraordinary news such as collapsing crude oil prices intervenes. He notes the Fed never fights market rates, and with market rates having risen globally on higher energy prices and after the ECB hike, more central banks are expected to follow with rate increases. The big news is expected to be the FOMC statement signaling whether the Fed is one and done or planning more hikes, though under new Fed Chairman Warsh the Fed may not provide good guidance since Warsh wants Wall Street to take its cue from market rates. With a hike already baked in, Navellier sees no negative market reaction on September 16, though he suspects stocks will trade sideways ahead of the meeting. He highlights three stocks: Super Micro Computer, which reported $60 billion in new orders in its fourth quarter of fiscal year 2026 with revenue up 91.4% year-over-year to $11.1 billion and earnings up 314.6% to $1.70 per share, a 77.1% earnings surprise; Cenovus Energy, whose second-quarter production rose 26% year-over-year to 970.4 thousand barrels of oil equivalent per day and earnings surged 237.2% to $2.87 billion, or $1.53 per share, a 31.9% earnings surprise; and Kennametal, which achieved 237.5% annual earnings growth and 20% annual revenue growth in fiscal year 2026 and expects first-quarter fiscal 2027 sales of $745 million to $775 million and adjusted earnings of $2.50 to $2.80 per share.

Professional tools and equipment stocks reported a very strong second quarter, with the eight companies tracked beating analysts' revenue consensus estimates by 1.8% and next quarter's revenue guidance coming in 14.3% above expectations. Stanley Black & Decker reported revenues of $3.96 billion, flat year over year and in line with expectations, while beating EPS and EBITDA estimates. Kennametal delivered the fastest revenue growth, up 42.6% year over year to $736.6 million, and raised full-year guidance the most. Lincoln Electric posted revenues of $1.22 billion, up 12% year over year, but missed organic revenue estimates. Hyster-Yale Materials Handling saw revenues decline 15% year over year to $812.9 million, the slowest growth among peers, while Hillman grew revenues 9.8% to $442.3 million and beat full-year revenue and EBITDA guidance.

Kennametal reported fourth-quarter fiscal 2026 results with organic sales growth of 42%, marking the fourth consecutive quarter of organic sales growth. Adjusted earnings per share reached a record $2.96, up from $0.34 in the prior-year period, driven by strong price realization and volume improvements. For the full fiscal year, organic sales increased 19% and adjusted EPS rose to $4.57 from $1.34. The company provided a fiscal 2027 outlook with sales expected between $3.33 billion and $3.45 billion and adjusted EPS in the range of $4.15 to $5.15. Free operating cash flow was negative $79 million for fiscal 2026, but the company expects free operating cash flow to turn positive in the second half of fiscal 2027.

Kennametal Inc. initiated its fiscal 2027 outlook, projecting adjusted earnings of $2.50 to $2.80 per share on sales between $745 million and $775 million for the first quarter. For the full fiscal 2026 year, the industrial technology firm now expects adjusted earnings of $4.15 to $5.15 per share on sales of $3.33 billion to $3.45 billion. The company also declared a quarterly cash dividend of $0.20 per share, payable August 25, 2026 to shareholders of record as of August 11. In pre-market trading, KMT shares rose 5.26 percent to $38.00 on the NYSE.

Snap-on reported first-quarter revenues of $1.31 billion, up 5.2% year on year and exceeding analysts' expectations by 2.4%. The professional tools and equipment industry overall posted a strong quarter, with the 10 tracked companies beating consensus revenue estimates by 1.9% on average and guiding next quarter's revenue 1% above expectations. Among peers, Kennametal delivered the fastest revenue growth at 21.8% to $592.6 million, while Hillman was the weakest performer with a 3% increase to $370.1 million that missed estimates by 0.7%. Snap-on shares were flat after the report, trading at $381.28.