Top executives for Thomas & Betts said they're pleased with the performance of the company's electrical business segment despite a 16 percent year-over-year decline in sales. Dominic Pileggi, chairman and CEO, told analysts in the company's conference call that the electrical segment returned earnings of $76 million or 19.3 percent of sales.
Pileggi doesn't see distributors continuing to reduce inventory levels beyond what they've already done in response to the economic downturn - instead they're replacing inventory on a one-for-one basis, a strategy he expects to see them continue until the outlook brightens.
"...distributors in general are replacing or replenishing their inventory item for item only as it moves out the door. Our distributors are capitalizing on our fast cycle logistic model that replaces their stock very quickly and helps improve their working capital," Pileggi said. "For Thomas & Betts products, we don't expect distributors to change their inventory management strategy until the economic recovery is more clearly evident and increased demand has proven to be sustainable."