NEW YORK Tool and drill manufacturer Kennametal Inc. has forecast an improvement in industrial production after seeing earnings and sales fall in its fiscal year.
The Latrobe, Pa.-based company posted net income of nearly $203.3 million for the 12 months ended June 30, down 33.8 percent from more than $307.2 million the previous year, on sales that fell 5.4 percent to $2.59 billion.
The decline in net sales was "driven by an 8-percent organic decline, a 2-percent unfavorable effect from currency exchange and a 1-percent decline due to fewer business days," Kennametal said. "Operating income decreased primarily due to lower sales volume, lower absorption of manufacturing costs related to reduced sales volume and an inventory reduction initiative, as well as unfavorable currency exchange."
The company forecast organic sales growth of between 5 and 7 percent and total sales growth of 4 to 6 percent in fiscal 2014.
"Kennametals outlook reflects expectations of continued macro-economic improvement, with worldwide industrial production building momentum. While manufacturing and industrial sectors are projected to expand over the next 12 months, underground coal mining will likely remain weak globally as well as some near-term project delays in the energy markets," the company said.