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First-quarter 2003 financial results are in now for many publicly held companies, and they show many electrical companies are still struggling with slow demand.
Encore Wire Corp., McKinney, Texas, said net sales for the quarter ended March 31, 2003, totaled $67.2 million compared to $64.2 million during the first quarter of 2002, the company's first quarterly loss in eight years.
With wire and cable prices at historically low levels during the first quarter, intense competitive pressure compressed gross margins to the lowest levels in the history of the company, resulting in a net loss for the first quarter of 2003 of $517,000 versus the $2.4 million net income reported in the first quarter of 2002.
Vincent A. Rego, company chairman and CEO said, “The past two to three years have proved to be very challenging for businesses across a broad spectrum of American industry, including the building wire industry. Competitors have been publicly reporting poor results for the last couple of years. In the last three quarters this has caught up with Encore, resulting in the first quarterly loss this company has reported since 1995.”
Rego said while the company is disappointed with its performance, it must be viewed in the context of the current economic environment. “While many companies within and outside our industry have been forced to retrench their operations and compromise their future, we have planned for our future with the capital improvement project we completed last year,” Rego said. “With this project behind us, we have the capability to approach the future confidently, while our short-term focus is one of riding this storm out.”
Cooper Industries Ltd., Bermuda, reported first-quarter net income of $56.6 million compared with $48.8 million a year ago. Sales decreased to $957.8 million from $975.0 million, with electrical products down 1.9 percent and tools and hardware down 1.2 percent.
“Our first-quarter earnings were consistent with our previously stated projections, and we are on track to meet our cash flow objective for the year, said H. John Riley, Jr., chairman, president and chief executive officer. “Even more important, we achieved positive margin improvement compared with last year's first quarter. Despite having to battle a continued weak market environment, we are making very real progress in our programs to control costs and heighten productivity.”
Revenues in Cooper's North American lighting fixtures, wiring devices and support systems businesses were down slightly when compared to the first quarter of 2002, due to continued soft commercial construction markets and somewhat weaker retail channel sales. Modest improvements in selected industrial markets offered some signs of encouragement during the quarter.
Hubbell Inc., Orange, Conn., saw a 39 percent increase in first-quarter sales. Sales for the quarter were $419.4 million or a 39 percent increase over sales of $301.7 million reported for the same period in 2002.
Hubbell said there was slowing demand across the industrial and utility markets, with concerns over the conflict with Iraq.
“Activity in the U.S. economy was significantly slower in each successive month of the first quarter,” said Timothy H. Powers, president and chief executive officer “with concerns leading up to the conflict with Iraq causing our customers to delay decisions to proceed on many commercial projects. Despite overall markets turning down, a positive comparison year-over-year was gained in earnings per share.”
Hubbell said the slow pace is likely to continue in the near-term.