Baldor sees declines in quarterly sales, income
by April 29, 2009 3:52 pm 58 views
Baldor Chairman and CEO John McFarland reported Wednesday (April 29) that 2009 is shaping up to be a bad year and it’s only going to get worse.
“We saw weakness throughout most of our end markets and customers,” noted the statement from the company.
Despite the blunt honesty or maybe because of it, the share price of Baldor (NYSE: BEZ) rose more than 6%. The shares closed the day at $21.15, up $1.30. During the past 52 weeks, the share price has ranged from a $39.90 high to a $10.21 low.
Fort Smith-based Baldor Electric Co., a maker, designer and marketer of electric motors, motor drives, power transmissions and generators, reported in the quarterly earnings statement that net sales for the quarter were $402.47 million, down 14% from the first quarter of 2008.
The company reported $36.41 in net income for the quarter, up 42% over the same quarter in 2008. However, when excluding a $35.74 million one-time gain from debt modification proceeds and the associated taxes, the net income was $14.8 million, or 42% lower than the same quarter in 2008.
“We believe 2009 will continue to be a difficult year, and we anticipate second quarter 2009 to be the most challenging quarter with sales down approximately 15-20%,” the company noted in the statement. “In the second half of the year, we expect additional benefit from our Bounty Hunt program, introduction of new products, a slower pace of distributor destocking, aggressive cost reductions and plant consolidations.”
McFarland said the company is on track to cut $80 million in costs from its 2009 budget, with $9 million of that coming from consolidation of manufacturing operations. McFarland cited a higher operating margin of 11.2% in the first quarter compared to 10.8% in the fourth quarter as an example of achieving reductions in overtime pay, employees and discretionary spending.
Key figures from report include:
• Sales of industrial motors were $272 million in the quarter, down 11%.
• Sales of mechanical power transmission products were $108 million, down 21%.
• Sales to domestic OEMS (original equipment manufacturers) were down 15%, and sales to domestic distributors were down 19%.
• International sales of $73 million comprised 18% of sales for the quarter and were down 4% from last year.
The company will hold its annual shareholders’ meeting May 2 at the Fort Smith Convention Center.