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Jun 30, 2025
Kennametal Q4 2025 Earnings Report
Kennametal reported its fiscal 2025 and fourth quarter results, with sales decreasing by 5% and a significant drop in operating income and EPS compared to the prior year quarter.
Key Takeaways
Kennametal faced significant market headwinds in Q4 2025, including persistent market softness, tariff impacts, and foreign exchange weakness, leading to a 5% decline in sales and a substantial decrease in both reported and adjusted EPS. Despite these challenges, the company continued its strategic initiatives in productivity, cost restructuring, and portfolio optimization, achieving $65 million in annualized run-rate pre-tax savings.
Q4 sales decreased by 5% to $516 million, primarily due to a 5% organic sales decline.
Reported EPS for Q4 was $0.28, a significant decrease from $0.47 in the prior year quarter, while adjusted EPS was $0.34, down from $0.49.
Operating income for Q4 was $31 million (6.1% margin), a sharp decline from $61 million (11.3% margin) in the prior year quarter, impacted by lower sales, higher costs, and increased tariffs.
The company achieved $65 million in annualized run-rate pre-tax savings by June 30, 2025, and increased its total cost savings target to $125 million by the end of fiscal 2027.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
Kennametal expects market headwinds to persist through fiscal 2026. For Q1 FY26, sales are projected to be between $465 million and $485 million, with adjusted EPS between $0.20 and $0.30. For the full fiscal year 2026, sales are anticipated to be $1.95 billion to $2.05 billion, and adjusted EPS is expected to range from $0.90 to $1.30.
Positive Outlook
- Anticipated foreign exchange tailwind of 2% for Q1 FY26.
- Strategic growth initiatives are expected to continue, with recent wins in Aerospace & Defense and Energy end markets.
- Continued focus on right-sizing capacity, cost structure, and portfolio optimization to build a more resilient business.
- Free operating cash flow expected to be approximately 120% of adjusted net income for FY26.
- Capital spending for FY26 is projected to be approximately $90 million, indicating continued investment in the business.
Challenges Ahead
- Market headwinds are expected to continue throughout fiscal 2026.
- Q1 FY26 sales outlook of $465 - $485 million is lower than Q4 FY25 sales of $516 million.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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