What's the outlook for KMT's EPS post-Q3 2025?

**Kennametal Inc. (KMT) is likely to face continued challenges in the near term, impacting its EPS post-Q3 2025.** Here's a detailed analysis: 1. **Recent Performance and Challenges**: KMT's recent performance has been affected by a decrease in sales across its key segments. Infrastructure segment sales dropped 4% organically, while metal cutting segment sales decreased by 7% year-over-year. This decline in sales has led to a reduction in EPS, with the adjusted EPS decreasing to $0.25 in Q2 2025 from $0.30 in the prior year quarter. 2. **Strategic Restructuring**: In response to these challenges, KMT has announced restructuring actions, including the closure of a facility in Massachusetts and the consolidation of two facilities in Spain. These actions are expected to lead to cost savings of $15 million by fiscal 2025. While these restructuring efforts are aimed at improving long-term profitability, they may initially impact earnings as the company navigates the transition. 3. **Market Expectations and Guidance**: Analysts' expectations for 2025 sales are between $1.95 billion and $2.0 billion, below the average estimate of $2.03 billion. The company's adjusted profit forecast for 2025 is between $1.05 and $1.30 million. This guidance suggests that EPS may remain under pressure in the post-Q3 2025 period, as the company works through operational inefficiencies and market headwinds. 4. **Cash Flow and Financial Health**: Despite the challenges, KMT's cash from operating activities has increased year-to-date to $101 million. This indicates that the company has a stable financial base to support its strategic initiatives, which could pave the way for a recovery in EPS over the longer term. In conclusion, while KMT's strategic restructuring and stable cash flow provide a foundation for potential recovery, the near-term outlook for EPS post-Q3 2025 remains cautious due to ongoing sales declines and adjusted profit guidance that suggests limited EPS growth in the immediate future.