Actuant Corp. chief executive officer Randy Baker said there have been signs of optimism in industrial markets, but the positive momentum hasn’t translated into revenue quite yet.
Menomonee Falls-based Actuant saw profits drop more than $10 million and sales decline 13 percent in the first quarter of its fiscal year, but executives said the results were essentially as expected.
The provider of hydraulic tools, energy market products and services and motion controls systems reported net income of roughly $5 million, down from $15.5 million during the same period last year, with earnings dropping from 26 cents to 8 cents per diluted share.
Net income was hampered by $5 million in transition charges and another $2 million in restructuring charges. The company’s adjusted earnings of 20 cents per diluted share was still down from 31 cents last year.
Revenues were down from $305 million to $265.8 million.
Sales were most sharply down in the company’s energy segment, going from $113.8 million to $83.7 million. Last year the segment had $15 million in revenue from a one-time Middle East service project and $5 million in U.S. sales carried over from the end of fiscal 2015.
The industrial segment was down 2 percent to $87.3 million and the engineered solutions segment was off 8 percent to $93.9 million.
“To summarize it in two words, as expected,” said Andy Lampereur, Actuant chief financial officer.
Both Lamperueur and Baker pointed to signs of stabilization for the company’s end markets.
Lamperuerur noted the year-over-year declines in sales for the company’s industrial segment have steadily improved from down 14 percent in the second quarter of fiscal 2016 to now down just 2 percent.
Baker said there is some optimism in the general industrial market from stabilization in oil and gas and commodity markets along with potential increased infrastructure spending under President-elect Donald Trump’s new administration.
But Baker also said the optimism hasn’t translated to order activity yet.
He said actions taken by OPEC counties and others to limit oil production have helped, but the market needs to have discipline to reduce oversupply and maintain price consistency.
“The key is we have to make sure the U.S. producers don’t go to full speed again,” he said.