Professional Tools and Equipment Stocks' Q2 Earnings Review: Kennametal's Disappointing Performance vs Lincoln Electric's Strong Results

Kennametal (NYSE:KMT) reported Q2 revenues of $516.4 million, down 4.9% YoY, missing analysts' expectations by 1.9%. The company's full-year EPS guidance missed analysts' estimates significantly, and adjusted operating income estimates were also missed. Lincoln Electric (NASDAQ:LECO) reported Q2 revenues of $1.09 billion, up 6.6% YoY, beating analysts' expectations by 5.1%. The company had a solid quarter with a strong beat of analysts' organic revenue estimates and EBITDA estimates.

Kennametal (NYSE:KMT) and Lincoln Electric (NASDAQ:LECO) both reported their Q2 2025 earnings, with starkly different results. Kennametal missed analysts' expectations, while Lincoln Electric exceeded them.

Kennametal (NYSE:KMT)
Kennametal reported Q2 revenues of $516.4 million, down 4.9% year-over-year (YoY), missing analysts' expectations by 1.9% [1]. The company's full-year EPS guidance missed analysts' estimates significantly, and adjusted operating income estimates were also missed. Kennametal's organic revenue fell 5% YoY, indicating that core operations were the primary driver of its results. The company's operating margin declined to 6.1%, down from 11.3% in the same quarter last year, suggesting increased expenses. Despite a 7.3% compounded annual growth rate in EPS over the last five years, Kennametal's two-year annual EPS declines of 5.4% show continued underperformance.

Lincoln Electric (NASDAQ:LECO)
Lincoln Electric reported Q2 revenues of $1.09 billion, up 6.6% YoY, beating analysts' expectations by 5.1% [2]. The company had a strong quarter with a solid beat of analysts' organic revenue estimates and EBITDA estimates. Lincoln Electric's operating margin expanded to 12.5%, up from 11.2% in the same quarter last year, indicating improved efficiency. The company's EPS grew at a 10.3% compounded annual growth rate over the last five years, highlighting its profitability and shareholder-friendly initiatives.

Key Takeaways
- Kennametal's Q2 results were underwhelming, with missed revenue and EPS estimates, and a declining operating margin. The company's long-term revenue growth has been poor, with an average annual decline of 2.7% over the last two years.
- Lincoln Electric's Q2 results were strong, with a significant beat of revenue and EBITDA estimates, and an expanding operating margin. The company's long-term EPS growth has been robust, with a 10.3% compounded annual growth rate over the last five years.

Investors should consider these factors when evaluating Kennametal and Lincoln Electric's prospects. Kennametal's recent underperformance and declining margins may indicate a challenging period ahead, while Lincoln Electric's strong results and improving profitability suggest a promising outlook.

References
[1] https://www.barchart.com/story/news/33918430/kennametal-nysekmt-reports-sales-below-analyst-estimates-in-q2-earnings-stock-drops-12-4
[2] https://finviz.com/quote.ashx?t=LECO