Several electrical companies reported an increase in second-quarter financial results. Following are financial snapshots of the earnings reports of some industry players.
W. W. Grainger, Chicago, said second-quarter earnings rose 19 percent as the company saw solid earnings growth in all three business segments.
Grainger earned $66.6 million for the second quarter compared with $56 million for the same period a year ago. Grainger, which operates almost 600 branches and 17 distribution centers, said total sales grew 7.7 percent to $1.26 billion.
“We saw sales increase in our branch-based and lab safety segments and solid earnings growth in all three business segments in the second quarter,” said Chairman and Chief executive Richard L. Keyser. “Although much of the sales growth was helped by a strong economy, our ongoing strategic investments are expected to contribute even more to revenue growth in the future.”
Eaton Corp., Cleveland, said quarterly earnings rose 73 percent, led by gains at its electrical and truck components units.
Quarterly earnings rose to $161 million from $93 million in the second quarter of 2003. Sales rose 19 percent to $2.4 billion.
The company said it expects to see end-market growth of 7 percent to 8 percent. In the electrical segment, second quarter sales were $697 million, up 21 percent over 2003. Excluding the impact of the Powerware and Electrum acquisitions, and the new joint venture formed with Caterpillar, second quarter sales were up 10 percent compared to 2003. Operating profits in the second quarter were $57 million. Operating profits before restructuring charges were $64 million, up 64 percent from results in 2003.
“End markets for our electrical business grew about 5 percent during the second quarter, the fastest quarterly growth since the first quarter of 2000. In addition, our operating margins expanded to 9.2 percent, compared to 8.2 percent in the first quarter,” said Alexander M. Cutler, Eaton chairman and chief executive officer. “We expect steady end market growth over the balance of the year, with more significant growth likely in 2005.
The electrical business was awarded during the second quarter with a contract from the U.S. Postal Service to test and maintain electrical switchgear, which is anticipated to total between $12 and $15 million annually over the next four years, and a contract worth $10 million to supply distribution and control equipment for a new power plant being constructed by Hitachi.
Fastenal Co., Winona, Minn., added 127 new locations to its distribution network during 2004, bringing the total at June 30 to 1,441.
Fastenal said it earned $34.8 million in the second quarter compared with $21.9 million in the year-earlier period. Sales increased 24.5 percent to $310.1 million.
Fastenal also said it plans to open more stores this year than initially expected, given the strength of the U.S. economy. The company now expects to open about 170 to 240 new sites in 2004, up from the 135 to 200 anticipated earlier.
3M, Minneapolis, said second-quarter net income increased nearly 25 percent to $773 million, compared with $619 million a year earlier. “Our employees continued to drive growth through strong connections with customers, leveraging our corporate initiatives and diverse technology base while maintaining good cost discipline,” said W. James McNerney Jr., 3M chairman and CEO. Worldwide sales in the second quarter totaled $5.01 billion, 9.5 percent higher than in the year-earlier quarter. In the United States, sales totaled $1.97 billion, up 2.7 percent from the same quarter of 2003. McNerney said organic growth remains the company’s focus.” He said continued geopolitical uncertainty causes 3M to maintain a conservative economic outlook.