Kennametal delivers record Q4 earnings and strong fiscal 2027 guidance, yet investors remain divided as negative cash flow and raw material pricing volatility cloud the company's long-term margin sustainability.
Kennametal reported record Q4 earnings and strong FY26 sales, but negative free cash flow and margin gains tied to tungsten pricing timing create a cautious outlook.
Kennametal posted record fiscal 2026 Q4 results with sales rising 43% to $737 million and adjusted EPS hitting $2.96. Despite these headline gains and significant margin expansion, the company reported negative free cash flow of $79 million, raising concerns that profit growth is driven by temporary raw material pricing timing rather than structural demand.
The margin expansion was largely attributed to favorable timing of raw material pricing, specifically tungsten, relative to costs, rather than an increase in underlying production volumes.