While electrical companies are beginning to see some improvement in earnings despite a soft market, many publicly held companies do not expect the economy to turn around anytime soon. Following is a sampling of financial statements from manufacturers.
The Genlyte Group Inc. said its first quarter earnings grew 1.6 percent over the first quarter of 2002. The company also reported record first quarter net income of $8.8 million. First quarter sales of $237.9 million were 2.5 percent higher than the $232.0 million reported last year.
“We are pleased to report first quarter sales and earnings increases despite a soft market which continues to affect our sales as construction remains sluggish,” said Larry Powers, the company's president and CEO. “The commercial construction market continues to be very weak, as does the industrial market. Although residential construction is still at a relatively high level, we have started to see signs of weakening in that area as well. The outdoor market was comparatively strong; however, we saw some softening in the first quarter due in part to severe weather impacting the northern half of the United States.”
The company was negatively impacted during the first quarter, Powers said, by relocating its most recent acquisition, Vari-Lite, to a new facility in Dallas, Texas. “We delayed shipments of our new VL3000 fixture due to start-up issues. Our controls division is in the process of consolidating with Vari-Lite at the new location. We fully expect to see increased efficiencies when the consolidation is completed.
“While we have seen some benefit from our price increase announced early in the year, it is still too early to determine how much total value we will realize as many distributors placed stocking orders prior to the price increase,” he said.
Powers said the company has completed the consolidation of its high-volume fluorescent business in its newly renovated facility in Sparta, Tenn., but not yet realized the full benefit of that consolidation.
Powers said the company doesn't expect the construction market to improve anytime soon, so it is taking actions to cope with these weak market conditions.
“These actions include continuing to refocus our sales force toward the more active markets of schools, health care and other institutional facilities and continuing to be diligent in cost controls. In addition, we are introducing a large array of new products at Lightfair next month in New York City.”
Eaton Corp., Cleveland, said quarterly earnings more than doubled as it cut costs to weather slow demand.
Eaton said it sees little overall growth in its end markets this year. It expects its markets in the first half of the year to be slightly weaker than a year ago, with growth resuming toward the end of the year.
Eaton Chairman and Chief Executive Alexander Cutler said markets were weaker in the first quarter than many people had expected and it is unclear where the catalyst for capital spending will come from in the year ahead.
Eaton said first-quarter net income rose to $72 million from $33 million a year ago.
First-quarter revenue climbed 12 percent from a year ago to $1.92 billion, boosted by acquisitions, favorable currency exchange rates and growth that exceeded industry trends, the company said.
Sales of industrial and commercial controls were flat excluding acquisitions as the electrical distribution equipment market remained weak.
In the past two years, Eaton has closed 34 plants and reduced its work force to 48,000 from 59,000.
GE reports 20% increase in first-quarter profits
General Electric Co., Fairfield, Conn., reported its first-quarter profit rose 20 percent.
GE's first quarter earnings before required accounting charges were $3.2 billion, compared with $3.5 billion in the same quarter last year. Revenue for the quarter was $30.3 billion, down 1 percent from $30.5 billion last year.
GE attributed the drop in revenues to lower U.S. gas turbine sales and the absence this year of NBC Winter Olympics broadcast revenue.
“In this tough economic environment, eight of our 13 businesses delivered double-digit earnings growth,” said GE chairman and chief executive Jeffrey Immelt. Immelt also said divestitures are “highly likely” this year. Among the potential sales are a portion of GE's reinsurance business.