Actuant down on tax increase

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Menomonee Falls-based Actuant Corp. reported fiscal second quarter net earnings of $41.4 million, or 56 cents per share, up from $28.4 million, or 38 cents per share, in the second quarter of 2013.

Net sales for the quarter ended February 28 were $327.8 million, up from $300.5 million in the same period a year ago.

But diluted earnings per share from continuing operations were 30 cents, down from 35 cents in 2013, which the company attributed to a higher effective income tax rate.

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The company attributed core sales growth and acquisitions to the increase in total sales year-over-year. The sale of the electrical business also resulted in a net gain in discontinued operations, the proceeds of which were used to pay down debt and fund share repurchases.

Actuant repurchased 2.6 million shares of common stock for $94 million in the quarter, completing its 7 million share repurchase authorization. The board of directors approved another 7 million share buyback.

“On a consolidated basis, results in the quarter were generally in line with our forecast and reflected the normal seasonal slowdown,” said Mark Goldstein, chief executive officer. “The 4 percent core sales growth includes significantly improved activity in Energy and continued solid growth in Engineered Solutions. Industrial’s core sales decline reflected cautious spending patterns by customers as well as negative North American weather and facility relocation impacts. We are pleased with the progress we are making on some of the operational issues within Energy that we highlighted last quarter. However, the impact of segment mix, choppy demand, and other inefficiencies related to facility closures and relocations weighed on consolidated profit margins. While our pre-tax income increased year-over-year, tax expense doubled, resulting in a decline in year-over-year second quarter EPS.”

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