Baldor Q3 income up 104%; up 12% year-to-date
by October 27, 2010 4:08 pm 87 views
On a day when the U.S. Commerce Department reported that durable goods orders fell 0.8% in September, Fort Smith-based Baldor Electric Co. reported Wednesday (Oct. 27) that its third-quarter net income was up more than 100% compared to the 2009 period.
Baldor, a maker, designer and marketer of industrial electric motors, motor drives, power transmissions and generators, posted third-quarter net income of $25.659 million, up 104% over the third quarter of 2009. For the first nine months of 2010, the company has earned $63.495 million, up 12% over the 2009 period.
Total revenue for the third quarter was $453.732 million, up 19% over the 2009 period. Total revenue for the first nine months of 2010 is $1.29 billion, up 11% over the 2009 period.
"The 14.8% operating margin we achieved this quarter is an all-time record for Baldor. This margin compares to 12.8% one year ago and 14.6% last quarter,” Baldor Chairman and CEO John McFarland said in the earnings statement. “Over the last several years, we’ve made a number of significant productivity improvements throughout the Company. As a result, we believe we will have further margin expansion in 2011."
McFarland said double-digit incoming order growth rates seen in the third quarter continued into October, with the order backlog approaching $200 million. The company expects fourth quarter net sales growth to be as high as 25%.
The company also paid $13 million toward its goal of reducing long-term debt by at least $75 million in 2010. Year-to-date debt reduction totals $55 million, meaning the company will need the cash flow from a strong quarter to pay at least $20 million on its debt. Baldor accumulated significant debt in the $1.8 billion acquisition of Rockwell Automation subsidiaries (Dodge, Reliance) in November 2006. Outstanding debt at the end of the second quarter was $1.15 billion, down from the $1.205 billion at the end of 2009.
The company provided several notes on the quarter.
• Mechanical power transmission products had the strongest growth with a 26% year-over-year increase.
• Premium-efficient motors had a 32% sales increase from last year, bringing them up to 19% of total motor sales for the quarter.
• Sales of all products to domestic original equipment manufacturers (OEMs) were up 24% for the quarter, and sales to domestic distributors were up 20%.
• The price of copper has been rising steadily for several months. If copper prices remain at these high levels, we anticipate a price increase at the beginning of 2011.
The 2010 comparisons are boosted by the company’s lackluster financial performance in 2009. Baldor’s 2009 total sales and net income were down 22% and 40%, respectively, compared to 2008. Net income reached $59.796 million, compared to $99.423 million in 2008. Total sales in 2009 were $1.524 billion, compared to $1.954 billion in 2008.
Baldor employs between 7,000 and 7,500 in 26 plants in five countries and sales offices serving more than 80 countries. About 2,000 are employed in the Fort Smith area.
Baldor shares (NYSE: BEZ) closed Wednesday at $41.46, down cents. The earnings report was released after the markets closed. During the past 52 weeks, the share price has ranged from a $43.31 high to a $24.67 low.