There have been some positive signs in the “broad industrial landscape,” but Actuant chief executive Randy Baker said the “sustainability and trajectory of improvement are yet to be determined.”
Menomonee Falls-based Actuant Corp., which makes hydraulic tools, position and motion control systems and specialized products for energy markets, reported net income of $5.1 million and earnings of 8 cents per diluted share for the second quarter of fiscal 2017, a significant improvement over last year’s $159.2 million, or $2.70 per share, loss. That quarter, however, included a $170 million write-off because of weakness in oil and gas and off-highway markets.
The company reported adjusted earnings of $6.6 million, down from $12.3 million during the same period last year.
Sales for the quarter were down 1.7 percent to $258.9 million. The company said its core sales were down 3 percent with the net of acquisitions and divestitures providing a 2 percent boost while foreign currency cut into sales by 1 percent.
Baker said core sales in the company’s industrial and engineered solutions segments were positive for the first time in two years.
The industrial segment increased revenue by 12.8 percent to $91.6 million, boosted 2 percent by the acquisition of Larzep. The increase was the result of broad-based demand improvement across all geographies and product lines, the company said.
The engineered solutions segment reported revenue down 1.7 percent to $94.3, although that figure included a 3 percent drop from divestitures and a 1 percent headwind from foreign currency. The company credited robust production by heavy-duty truck OEMs in China, but added that demand remains tepid across agriculture and off-highway markets.
Sales in Actuant’s energy segment were down 15.4 percent to $72.9 million, although the company said core sales were down 21 percent. The decline was the result of several large products during the same period last year and tight customer spending controls on maintenance activities.
Baker said the current price range of oil is problematic for Actuant’s business and prices have been hampered by oversupply. After trading between $52 and $54 per barrel for the first two months of the year, prices have fallen in March to around $47.50 per barrel.
“They need discipline in the oil industry to improve price dynamics,” Baker said.
