Milwaukee-based Rexnord Corp. reported mixed results to start its financial year with a challenging industrial environment hampering part of the business as growth in nonresidential construction boosted another.
For the first quarter of fiscal 2017, the company reported net income of $18.9 million, a 10.8 percent drop from the same time last year. Earnings were down slightly from 20 cents to 18 cents per diluted share.
Rexnord reported revenue of $471.8 million, a 2.7 percent drop.
The figure was obscured by a number of factors. Core sales were down 1 percent, excluding a 2 percent drop from exiting the Rodney Hunt Fontaine product line. The acquisition of Cambridge International Holdings Corp. added 1 percent to revenue while foreign currency was 1 percent hindrance.
“Although the industrial environment remains challenging, demand conditions in our nonresidential construction, aerospace, and food and beverage end markets continue to be favorable to growth and our investments in innovation and operational excellence initiatives are expected to drive incremental growth and value creation,” said Todd Adams, Rexnord president and chief executive officer.
Rexnord’s process and motion control segment reported revenue of $264 million, down 3 percent from last year. The segment was the beneficiary of the Cambridge acquisition as core sales were off 5 percent. The company said adverse original equipment manufacturer and end user demand across several end markets was only partially offset by positive sales growth in our industrial distribution channels and our consumer-facing end markets.
The water management segment reported revenue of $208 million, a 2.5 percent drop. Core sales, however, were up 3 percent after excluding revenue lost through the exit of the Rodney Hunt Fonatine product line. The company reported growth from increased demand in nonresidential construction end markets and the timing of shipments to water and wastewater treatment end markets.
“During the quarter, we closed an important acquisition that provides new pathways to enhance our growth, while also reducing our outstanding debt by $100 million. Our supply chain optimization and footprint repositioning initiative remains on track to deliver $30 million of annualized cost savings as we exit this fiscal year,” Adams said.
Company executives will discuss the results in more detail during an earnings call Tuesday.