Kennametal aims to double sales by 2017
By Nick Zieminski
NEW YORK (Reuters) - Kennametal Inc (KMT.N: Quote) said it aims to double its revenue by 2017 through acquisitions, new products, expansion in emerging economies, and growth in its industrial markets, and the tool maker affirmed its 2013 sales and profit forecasts.
"We have a very clear path of doubling our revenue in the next five years," Chief Executive Carlos Cardoso told an investor conference on Wednesday.
Latrobe, Pennsylvania-based Kennametal, is often considered a proxy for global industrial production, more than larger, more diversified manufacturers.
The company, with fiscal 2012 sales of $2.65 billion, said it was targeting 2017 revenue of $5 billion to $6 billion. It cited expected growth in aerospace, transportation and engineering markets. It aims for 30 percent of sales coming from Asian markets within five years, up from about 17 percent now.
Kennametal forecast fiscal 2013 sales of $2.93 billion to $3.01 billion, and earnings per share of $4.10 to $4.40. Analysts were looking for $4.20 per share on sales of $2.98 billion.
Kennametal's publicly-traded peers include Lincoln Electric (LECO.O: Quote), Timken Co (TKR.N: Quote), Joy Global JOY.N, Ametek (AME.N: Quote) and Dresser-Rand DRC.N. Some analysts cite Sweden's Sandvik (SAND.ST: Quote) as the closest direct rival, but that company's market capitalization is five times larger than Kennametal's.
Cardoso said the environment for mergers and acquisitions (M&A) was the best he has ever seen, because sellers have seen prices bounce from recession lows but remain nervous about a choppy market.
"We have to be prepared to make the acquisitions if they come together," he said. "If we're not prepared, they go to someone else." Continued...