Several electrical companies reported an increase in second-quarter financial results. Following are financial snapshots of the earnings reports of some industry players.
Thomas & Betts Corp., Memphis, Tenn., reported second-quarter net earnings of $41 million, up 44 percent compared with $28.4 million in the year-ago period.
Revenue rose 11.9 percent to $467.9 million in the second quarter compared with $418.1 million last year. Higher sales volume and price increases to offset higher material and energy costs contributed significantly to the sales improvement.
Electrical segment sales were $383.3 million in the second quarter, up 12.1 percent compared with the second quarter 2005. Improved sales volume as well as higher selling prices contributed to the sales growth. Strong demand in light commercial construction, industrial maintenance and repair and utility distribution markets drove the volume improvement.
Electrical segment earnings were $51.4 million in the quarter, up approximately 38 percent compared with the second quarter 2005. As a percent of sales, segment earnings were 13.4 percent in 2006, up 2.5 percentage points over 2005. The earnings improvement reflects higher sales volumes, operating efficiencies and the company’s continued ability to offset higher material and energy costs through higher selling prices.
“Our core electrical markets have performed well in the first half of 2006, and we expect this trend to continue for the balance of the year,” said Dominic J. Pileggi, chairman and chief executive officer.
3M Co., St. Paul, Minn., said its second-quarter profit rose 17 percent. Second-quarter worldwide sales totaled $5.7 billion, up 7.5 percent compared with the second quarter of 2005. The company said it earned $882 million for the three months ended June 30 versus $754 million during the same period last year.
Revenue rose 7 percent to $5.69 billion from $5.29 billion a year ago. As the company stated in a July 7 press release, second-quarter sales and profits were impacted in large part by lower than expected sales volumes and higher than anticipated new capacity start-up costs in its Optical Systems Division, which is part of 3M’s Display and Graphics business segment. 3M makes films that coat LCD television and computer screens.
WESCO International Inc., Pittsburgh, more than doubled its second-quarter profit. The company reported net income for the quarter ending June 30 of $55.2 million versus profit of $27.4 million in the year-ago quarter. Net sales for the second quarter increased 26 percent to $1.34 billion from $1.06 billion. Gross margin improved to 20.3 percent from 18.3 percent.
The company credited two acquisitions completed last year with adding $107 million in sales. Chief Financial Officer Stephen A. Van Oss said, “We continue to see sustained momentum in our end markets as demand across most sectors remains healthy. In particular, we see improvement in our commercial construction activity, in addition to strong maintenance, repair and operating supply sales.”
Cooper Industries Ltd., Houston, said its second-quarter profit increased 2 percent and revenue rose 8 percent. Net income for the period was $99.5 million, or $1.06 per share, compared with $97.3 million, or $1.02 per share, for the year-ago quarter. Revenue grew to $1.29 billion from $1.19 billion.
Electrical Products segment revenue for the second quarter of 2006 increased 9 percent to $1.10 billion, compared with $1.01 billion in the second quarter of 2005. Recent acquisitions contributed approximately 2 percent to the year-over-year growth. Favorable currency translation had a negligible impact on the second quarter. Segment operating earnings were $177.5 million, an increase of 20 percent from $148.2 million in the prior year’s second quarter.
The increase in revenues for the electrical products segment reflects continued strong growth in industrial and utility markets, and improved activity in commercial markets. Sales to the retail channel were soft, against very strong comparables in the second quarter of 2005.
Kirk S. Hachigian, the company’s chairman, president and chief executive, said Cooper is cautiously optimistic about its prospects for the rest of 2006.
“The global energy infrastructure continues to grow, with solid demand from utilities and the industrial sector, and improving nonresidential construction offsetting slower residential construction,” Hachigian said.
Encore Wire Corp., McKinney, Texas, said its second-quarter profit grew by 2,252 percent. Net income for the three months ended June 30 rose to $57.1 million compared with a profit of $2.4 million in the second quarter of 2005.
Sales more than doubled to $362 million, from $169.3 million in the same period last year. The company said the increase in net sales dollars was due primarily to higher prices for building wire this year.
“Copper continues to trade near historic highs, driven by strong global demand, although copper prices have been relatively volatile,” said Daniel L. Jones, president and chief executive officer of Encore Wire. “Demand from our customers has also remained strong. A variety of sources indicate the outlook for commercial construction is very positive nationwide. We are also very pleased to report that we began shipping armored cable to customers in July from our new armored cable plant.”
The Fastenal Co. of Winona, Minn., reported a 19.7 percent increase in net sales for the quarter ended June 30. Net sales for the three-month period ended June 30, 2006 totaled $458.8 million, an increase of 19.7 percent over net sales of $383.3 million in the second quarter of 2005. Net earnings increased from $44.6 million in the second quarter of 2005 to $51.5 million in the second quarter of 2006, an increase of 15.4 percent.
During the first half of 2006, Fastenal opened 132 new sites. (Fastenal opened 136 new sites in the first six months of 2005.) These 132 new sites represent an additional 7.5 percent stores since Dec. 31, 2005. There were 7,098 site employees as of June 30, an increase of 11 percent and 15.6 percent from December 31, 2005 and June 30, 2005, respectively.