(Reuters) - Kennametal Inc’s (KMT.N) quarterly profit missed Wall Street estimates by a wide margin on Wednesday and the industrial toolmaker cut its sales and earnings outlook for the full year, citing slowing economies.
Its shares slid 6.7 percent in early trading to $34.46.
Kennametal, considered a proxy for global industrial production, said net income fell to $46.4 million, or 57 cents per share, in the fiscal first quarter that ended September 30, from $72.0 million, or 88 cents per share, a year ago.
That fell short of average analyst estimates by 30 cents a share, according to Thomson Reuters I/B/E/S.
Sales were down 4 percent to $629 million, below estimates of $690 million. A stronger U.S. dollar contributed to the sales decline.
Latrobe, Pennsylvania-based Kennametal said the macroeconomic environment was slowing, but U.S. and Asian industrial demand was likely to improve in the second half of its fiscal year that ends in June.
U.S. manufacturing expanded modestly this month, but the sector continued to contract in the euro zone and in China, according to Markit.
Kennametal products, such as specialized coatings and machine tools, are used in transportation, aerospace, mining and energy industries. The company generates more than one-half of its sales outside North America and has said it aims to double revenue by 2017.
Kennametal’s publicly traded peers include Lincoln Electric Holdings Inc (LECO.O), Timken Co (TKR.N), Joy Global Inc JOY.N, Ametek Inc (AME.N) and Dresser-Rand Group Inc DRC.N. Some analysts cited Sweden’s Sandvik AB (SAND.ST) as the closest direct rival, but its market capitalization is much larger than the one for Kennametal.
Kennemetal forecast fiscal 2013 profit of $3.40 to $3.70 per share, below its previous range of $4.10 to $4.40 and below analyst estimates of $4.15 a share.
It estimated 2013 sales will increase 3 percent to 6 percent. Its previous estimate called for sales to rise 7 percent to 10 percent.
Reporting by Nick Zieminski in New York; Editing by Jeffrey Benkoe and Maureen Bavdek