Compressed Air Best Practices - November 2008 - (Page 46) | 11–12/08 Compressed Air Industry STEEL & METALS | WALL STREET WATCH “The Win Strategy initiatives we have been implementing over the past seven years have better prepared us to weather this uncertainty in our markets. For example, today we have exposure to a greater number of end markets, many of them less cyclical than before. We also have much better geographic balance with greater than 50% of our industrial segment revenues and profits generated from international markets. Additionally, our cost structure is much more flexible than in the past and our ongoing focus on lean enterprise is delivering continuing productivity improvements. While the economic outlook for the near future remains uncertain, Parker is better able to adapt to changing circumstances in our operations than in previous downturns. “While we are currently implementing contingency plans for the short term, we remain focused on managing our business for the long term and utilizing our strong cash position. We recently completed four acquisitions, including three on the first day of our fiscal 2009 second quarter, which added just over $460 million in annualized revenues. These investments help us extend our geographic reach and further our exposure to growth markets such as life sciences. Additionally, we repurchased shares and increased our dividend for the 52nd consecutive year, reflecting our confidence in the future.” Segment Results In the Industrial North America segment, first-quarter sales increased 10.1% to $1.1 billion, and operating income increased 3.4% to $160.5 million, compared with the same period a year ago. Orders In addition to financial results, Parker also reported an increase of 1% in total orders for the quarter ending September 30, 2008 compared with the same quarter a year ago. Parker reported the following orders by operating segment: Orders increased 2% in the Industrial North America segment, compared with the same quarter a year ago. Outlook For fiscal 2009, the company revised guidance for earnings from continuing operations to the range of $5.35 to $5.75 per diluted share. Previous guidance for earnings from continuing operations was $5.65 to $6.05 per diluted share. “There is enough uncertainty in many of our end markets and sentiment among our customers to warrant a downward revision in our earnings expectations for the year,” added Washkewicz. “While this ultimately may prove to be conservative, at this time we believe it is prudent. Having said that, our earnings guidance still assumes that operating margins will be significantly above the levels we achieved at the bottom of the last economic cycle, evidence that we have made significant progress in transforming Parker into a premier diversified company.” 46 www.airbestpractices.com http://www.airbestpractices.com
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