Kennametal Stock Earnings Reports

Kennametal reported Q3 FY2025 results with sales down 6% year-over-year (metal cutting organic -4%, infrastructure organic -2%) and modest weakness across regions, with EMEA the softest market. Aerospace & Defense was a bright spot (steady improvement; infrastructure aerospace up ~28% year-over-year in reported comments). Adjusted EPS was $0.47 versus $0.30 a year ago, aided materially by an Advanced Manufacturing production tax credit (~$10M benefit) and approximately $6M of restructuring savings in the quarter. Management is on track for the $15M run-rate savings announced earlier and expects $65M of annualized savings by fiscal year end toward a $100M target. The company tightened FY2025 sales guidance to $1.97B–$1.99B, lowered organic volume expectations (~-5% to -4%), but raised adjusted EPS guidance to $1.30–$1.45 (includes an approximate $0.05 negative impact from tariffs). Management estimates the tariffs in effect as of April 30 could create roughly an $80M annualized cost exposure globally but outlined mitigation actions (rebalancing production, optimizing global product flow, alternative sourcing, selective tariff surcharges) and stated intent to fully mitigate the direct impact. Cash generation remains healthy: Q3 YTD operating cash flow was $130M, free operating cash flow $63M YTD, returned $40M to shareholders in the quarter ($25M buybacks, $15M dividends), capex guide ~$90M for the year, and liquidity about $787M (cash + revolver). Key near-term headwinds to monitor: tariff developments, tungsten price increases (recent rise from low-$300s to ~mid/high-$300s), FX (~$20M sales headwind at midpoint for FY25), and inventory/WIP increases tied to lower demand and raw material timing. Management expects to discuss FY2026 outlook, portfolio and footprint initiatives, and first-year CEO progress on the August call.