Milwaukee-based Rexnord Corp. today reported net income of $24.3 million in its fiscal 2016 third quarter, up from $2.2 million in the same quarter the previous year. Revenue, however, was down more than 7 percent and the company reported adjusted earnings per share that were unchanged.
The company reported earnings of 24 cents per diluted share for the quarter, compared with 2 cents in the same quarter of 2015. The company had adjusted earnings per share of 38 cents for both quarters, as a $31.4 million actuarial loss on pension and post-retirement benefit obligations occurred in the third quarter of fiscal 2015. The adjusted net income for the fiscal 2016 third quarter was $39.3 million, compared with $40.2 million in the third quarter of 2015.
“Our third quarter operating results were essentially in line with our expectations heading into the quarter,” said Todd Adams, Rexnord president and chief executive officer. “As we anticipated, the December quarter was a bit choppy from a demand perspective as customers managed their inbound shipments and inventory levels into the calendar year-end.”
Rexnord’s revenue for the third quarter was $460.2 million, down from $497.1 million during the same quarter in fiscal 2015. Core sales were down 4 percent. Foreign currency contributed a 4 percent decline and acquisitions added a 1 percent increase.
Rexnord reported revenue for its process and motion control segment was down 11 percent to $265.8 million. The decrease was driven by lower demand across several end markets, although it was offset by strength in aerospace and food and beverage.
Revenue in the water management segment was down 2 percent to $194.4 million. Sales were actually up 2 percent when excluding unfavorable currency exchange. The company reported favorable trends in nonresidential construction were offset by lower shipment to water and wastewater infrastructure end markets.
“Although the industrial environment remains quite challenging, we continue to deliver strong profitability and free cash flow, and we are encouraged by the stabilizing aftermarket volume trends seen in our process and motion control distribution channels and the ongoing expansion of water management margins,” Adams said.
The company also adjusted its guidance for the fourth quarter and full fiscal year, citing recent events in the world economy.
“With additional uncertainty across many industrial end-markets and the volatility in global capital markets experienced in recent weeks, we expect increased caution from our customers as we head into our fourth quarter and believe it is prudent to plan for further adjustments in our customers’ near-term production rate and inventory decisions,” Adams said.
