Earnings Roundup: Anixter International, Rockwell Automation and Stanley Works
Industrial Distribution staff -- Industrial Distribution, 7/22/2008 7:11:00 AM
Distributor Anixter International Inc. and two manufacturers, Rockwell Automation Inc. and Stanley Works, posted quarterly sales and earnings results.Anixter
Second-quarter sales for the wire, cable and fastener distributor rose 7 percent to $1.62 billion, compared with $1.51 billion during the same period last year.
Net income for Glenview, Ill.-based Anixter rose 3.6 percent to $66.9 million, compared with $64.6 million during the second quarter of 2007.
Anixter said acquisitions, including its 2007 purchase of Eurofast SAS and the 2006 buyout of Italian fastener distributor MFU Holdings S.p.A, contributed $4.2 million in sales during the quarter. Excluding those sales, organic revenue growth came in at 4 percent.
The results also include after-tax charges of $2.6 million related to the retirement of former CEO Robert Grubbs.
“Second-quarter sales growth, which increased 10 percent on a consecutive quarter basis from the first quarter of this year, exceeded the longer-term seasonal trends of a mid-to-high single digit growth rate from the first to second quarter. However, as we have noted over the past year, our consecutive quarter growth of 14 percent from the first to second quarter of 2007 was well above that historical trend line, which presented us with a difficult year-on-year comparison,” president and CEO Robert Eck said. “While we continue to see select customer situations where sales are softer, we have not observed any broad-based negative trends in the various end markets and geographical regions where we have a business presence. We believe the overall market conditions, as they currently exist, should allow for consecutive quarter sales growth from the second to third quarter of this year. If we achieve a modest level of consecutive quarter growth it will move our third quarter year-on-year growth rates closer to our longer-term target of 8 to 12 percent yearly growth.”
Rockwell Automation
The motion control and power transmission products manufacturer posted third-quarter sales of $1.48 billion, up 15.2 percent compared with $1.28 billion during the same period last year.
Net income for Milwaukee-based Rockwell slid 7 percent to $152.6 million, compared with $164.2 million during the third quarter of 2007.
“We delivered solid top-line results, despite slower-than-expected growth in Europe and the U.S. Revenue growth was particularly strong in Asia-Pacific, Latin America and our solutions businesses, demonstrating strength in the ongoing diversification of our revenue base. Operating margins and EPS grew sequentially but came in lower than 2007, largely driven by continued slower growth in our higher margin product businesses,” chairman and CEO Keith Nosbusch said. “For the remainder of the fiscal year, we expect to see continued strength in Asia-Pacific and Latin America as well as in resource-based industries. However, macro-economic conditions in Europe and the U.S. are weakening. We have begun to see a change in buying behavior by some of our customers in consumer related industries, including project delays and curtailed capital spending. … We continue to monitor market conditions with a view toward rebalancing spending, as well as positioning ourselves to address a potential contraction, should it materialize. We remain committed to executing our growth and performance strategy, including continued investment in core technologies and the globalization of our business.”
Rockwell said it spent $57.4 million buying back 1.2 million shares of its own stock during the quarter under its $1 billion share repurchasing program, of which there remains $774.6 million available.
Stanley Works
Second-quarter sales for the hand tool manufacturer rose to $1.15 billion, up 5.3 percent compared with $1.1 billion during the same period last year.
Net earnings for New Britain, Conn.-based Stanley fell 6.7 percent to $79.6 million, compared with $85.3 million during the second quarter of 2007.
“As expected, U.S. market conditions remained challenging during the second quarter. The pro-active cost-containment actions implemented by our operating teams, complemented by our strong price realization processes and the benefits of a more diversified revenue base, have positioned the company to protect its earnings base and cash flows despite a highly inflationary environment and weakened U.S. economy,” chairman and CEO John Lundgren said.
Stanley said it expects “the recessionary conditions experienced in the first half of 2008 to continue into the second half of the year and possibly into 2009,” prompting it to enact contingency plans aimed at $20 million in pre-tax gains for the year. Those plans resulted in $8 million in pre-tax savings during the quarter.
“In addition, during the last 30 to 45 days, the company has experienced a marked acceleration in inflation, especially related to steel. As a result, the full year estimate of total cost inflation has increased from $100 … to a current view of $150 million. Due to rapid deployment of related price increases throughout the company, it is still expected that approximately 90 percent of this $150 million impact will be recovered in 2008,” the company said in a statement.
“As demonstrated by our first half results, the company continues to gain share in markets within its CDIY segment, as well as pursue growth within its industrial and security platforms. Despite the challenges associated with a strained U.S. economy, with solid free cash flow and strong performance in non-U.S. markets, Stanley continues to be well positioned to sustain its earnings base and achieve its long-term financial objectives,” Lundgren said.
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