Industrial toolmaker Kennametal Inc., hard-hit by a deep slump in the coal and oil industries, plans to cut 1,000 jobs and increase cost-cutting "substantially" in North America, Europe, Middle East and Africa following its second-straight year of losses.

Founded in 1938 in Latrobe, Pa., as McKenna Metals Co., Kennametal makes cutting and drilling tools used in oil and gas exploration, coal mining, road construction and other industries. To offset the slump in the coil and oil industries, Kennametal has been slashing costs and shedding operations.

As of June 30, 2015, the most recent figures available, Kennametal had about 12,700 workers, down about 6% from the year earlier, according to regulatory filings.

On Monday, Kennametal reported its annual loss narrowed to $226 million as sales fell to $2.1 billion, driven by an 11% organic sales decline, and said this year it expects to make $1.10 to $1.40 in adjusted profit with sales remaining roughly flat. On an organic basis, the company projects up to a 2% decline or 2% increase.

Analysts surveyed by Thomson Reuters project $1.21 a share in adjusted profit on $2 billion in sales.

Chief Executive Ronald M. DeFeo, the former chief executive at crane maker Terex Corp. who took over Kennametal's reins this year, said he expects result to improve this year.

"Even without a modest upturn in our end markets, we believe our improving cost position in combination with a more robust and proactive commercial strategy will produce improved margins," Mr. DeFeo said in a news release.

Shares closed Monday at $24.96, up 30% this year.

Write to Maria Armental at maria.armental@wsj.com

 

(END) Dow Jones Newswires

August 01, 2016 19:15 ET (23:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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