Cooper Industries Ltd., Houston, said its second-quarter earnings dropped slightly as it continued to see few signs of improvement in manufacturing activity.
Net income fell 2 percent to $72.4 million from $73.9 million a year earlier. Revenue increased to $1.01 billion from $1.00 billion.
“Like others serving our markets, we continued to face considerable economic headwinds during the second quarter,” said H. John Riley Jr., chairman, president and chief executive officer. “Commercial and industrial construction persisted at disappointingly low levels, and manufacturing activity overall showed few signs of improvement. Given this environment, we were pleased to report sequentially improved revenues and segment operating margins for the quarter.”
Second-quarter 2003 revenues from the Electrical Products segment were $839.0 million, compared with $843.3 million for the 2002 second quarter. Operating earnings for the segment in the 2003 second quarter were $109.2 million, compared with $107.9 million for the same period last year.
Cooper saw double-digit growth in retail channel sales during the quarter, particularly in residential lighting products, as “big box” chains continued to expand their market coverage. However, persistent weakness in the company’s key industrial and commercial construction markets negatively impacted almost all of the company’s other electrical products businesses. Revenues in the company’s European lighting and security business grew nearly 11 percent as a result of currency translation.
Riley said the company is encouraged that some economists now believe the manufacturing sector of the nation’s economy is about to begin a period of slow, steady improvement. However, Cooper remains cautious about the near-term outlook for its markets.
Woodhead Industries Inc., Deerfield, Ill., said its fiscal third quarter earnings ended June 28 increased 2.4 percent over the same period last year. The company reported third quarter total revenues of $46.7 million, up from $45.6 million in the same quarter last year. Net income was $2.0 million, up from $1.5 million last year.
Philippe Lemaitre, Woodhead Industries’ president and CEO, said, “Given the continued weakness in the manufacturing and industrial sector, we are comfortable with this quarter’s results. Internationally, we performed well, and we expect our global presence to be a source of continued support for the remainder of the year.”
The Electrical Segment sales in the quarter were $12.8 million, down 8 percent compared to last year due to the sale of the AKAPP operation earlier this year.
Lemaitre said, “Given the continued environment, we expect fourth-quarter revenues to be flat compared to the third quarter.” Hubbell Inc., Orange, Conn., reported sales of $449.3 million or a 9 percent increase over sales of $414.1 million reported for the corresponding period of 2002.
Incremental sales primarily resulted from acquisitions completed last year: LCA Group Inc., in April 2002, and the pole-line hardware business of Cooper Power Systems Inc., in November 2002. Net income in the second quarter fell 21.4 percent to $24.2 million as compared to $30.8 million reported for the equivalent period of the prior year.
Sales for the electrical segment rose by 10 percent and operating income, excluding special charges, rose by 4 percent. The expansion of Hubbell Lighting by acquisition in 2002 was the primary component of the higher volume, although the wiring systems and electrical products businesses also recorded modestly higher sales. Residential markets continued to show strength with Progress Lighting, a supplier of decorative fixtures, turning in another solid quarter. Commercial and industrial markets remain generally weak as construction awards continued to decline year-over-year. Pockets of strength were seen in certain segments of the market such as school construction projects and consumer spending in home centers.