Rexnord reports lower profit on industrial uncertainty

Rexnord Corp.
Rexnord Corp.

Milwaukee-based Rexnord Corp. reported fiscal second quarter net income of $22.6 million, or 22 cents per share, down from $37.2 million, or 26 cents per share, in the second quarter of 2014.

Rexnord Corp. headquarters
Rexnord Corp.’s Milwaukee headquarters.

Operating income totaled $55.5 million in the quarter, down from $78.7 million in the same period a year ago.

Rexnord’s second quarter revenue was $486 million in the second quarter, down 8 percent from $531 million in the second quarter of 2014.

The company pointed to industrial sector uncertainty as a factor in its earnings decline. Acquisitions contributed to some of its revenue decrease, in addition to an unfavorable foreign currency translation.

“Our second quarter operating results were in line with our expectations,” said Todd Adams, president and chief executive officer. “The underlying performance of our end markets tracked relatively close to what we anticipated, including the level of de-stocking within our industrial distribution channel. There’s no question that there’s a heightened level of uncertainty in many industrial end markets, but we believe we are well positioned from a portfolio perspective moving forward, given the ongoing strength and stability we see in our nonresidential construction, water and wastewater infrastructure, aerospace, and food and beverage end markets. Additionally, we have made substantial progress over the first half of our fiscal year in the implementation of our supply chain optimization and footprint repositioning initiative, which helps improve our profitability by $30 million on an annual basis as we exit next fiscal year, all at a time when our industrial end markets remain substantially below prior levels. We are also pulling forward some of the actions scheduled for next year into fiscal 2016 in order to get the benefits into our run-rate sooner.”

Rexnord has about 8,000 employees worldwide. It manufactures mechanical components used in complex systems and water quality, safety, flow control and conservation products.

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Molly Dill, former BizTimes Milwaukee managing editor.

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