Kennametal’s first quarter saw a significant positive reaction from the market, underpinned by robust revenue growth and strong margin expansion. Management attributed these results to a combination of increased pricing actions in response to surging tungsten costs and volume gains across key end markets, including infrastructure and aerospace. CEO Sanjay Chowbey highlighted that the company’s position as a vertically integrated tungsten supplier allowed it to secure material and capture market share, especially as competitors faced challenges in sourcing and lead times.
Is now the time to buy KMT? Find out in our full research report (it’s free for active Edge members).
Kennametal (KMT) Q1 CY2026 Highlights:
- Revenue: $592.6 million vs analyst estimates of $565.4 million (21.8% year-on-year growth, 4.8% beat)
- Adjusted EPS: $0.77 vs analyst estimates of $0.67 (14.6% beat)
- Adjusted EBITDA: $121.8 million vs analyst estimates of $103 million (20.6% margin, 18.3% beat)
- The company lifted its revenue guidance for the full year to $2.34 billion at the midpoint from $2.22 billion, a 5.4% increase
- Management raised its full-year Adjusted EPS guidance to $3.88 at the midpoint, a 72.2% increase
- Operating Margin: 13.4%, up from 9.1% in the same quarter last year
- Organic Revenue rose 19% year on year (beat)
- Market Capitalization: $2.73 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Kennametal’s Q1 Earnings Call
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Stephen Volkmann (Jefferies) asked about incremental margins on volume in the quarter. CFO Patrick Watson clarified that, after accounting for unusual items like price raw timing benefits and higher variable compensation, volume leverage was in line with historical norms.
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Steven Fisher (UBS) inquired about the ability to pass through price increases, especially in metal cutting. CEO Sanjay Chowbey explained that infrastructure pricing is more immediate, while metal cutting typically sees a three- to six-month lag in reflecting higher raw material costs.
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Steve Barger (KeyBanc Capital Markets) questioned the durability of recent share gains, wondering if they could persist after competitors resolve supply issues. Chowbey indicated that while some gains are opportunistic, the company is focused on converting these wins into lasting relationships.
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Tami Zakaria (JPMorgan) asked about the impact of tariff changes and potential refunds. Chowbey responded that the situation remains fluid and the company is not making any immediate changes, instead opting to monitor developments closely.
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Angel Castillo Malpica (Morgan Stanley) sought details on the sustainability of market share gains and the strategic use of promotional campaigns. Chowbey noted that share gains are a mix of structural wins and temporary supply-driven opportunities, with the company aiming to retain as much as possible through targeted initiatives.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will be watching (1) how effectively Kennametal retains newly acquired customers as supply conditions in the industry stabilize, (2) whether the company’s pricing actions can keep pace with ongoing tungsten price volatility, and (3) the timing and execution of postponed restructuring initiatives. Progress in digital customer engagement and volume recovery in lagging regions will also be important signposts for sustained growth.
Kennametal currently trades at $36.65, down from $37.51 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
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