Air filter maker Clarcor Inc. (CLC: Quote), Wednesday reported a decline in profit for the third quarter, hurt mainly by lower-than-expected revenues and higher income tax rate.
Chief Executive Chris Conway said, "Our third quarter financial results were below our internal expectations heading into the quarter primarily due to lower than expected sales of heavy-duty engine filtration products in the domestic aftermarket and China. In addition, softness in other markets contributed to our shortfall compared with expectations including sales of air filtration products to the swine industry and sales of packaging products."
Net sales at Engine/Mobile Filtration segment declined 2 percent, hurt mainly by lower heavy-duty engine filter aftermarket sales and unfavorable currency translation.
Industrial/Environmental Filtration unit sales increased 5 percent, driven mainly by higher natural gas vessel and aftermarket filter sales.
Packaging segment sales dropped 7 percent, due mainly to lower confection packaging and smokeless tobacco packaging sales.
Clarcor, which makes air and fluid filters for engines and buildings, said net sales for the quarter grew 1 percent to $286.73 million, but were below analysts' estimate of $298.88 million.
The Franklin, Tennessee-headquartered company's attributable net income for the third quarter dropped to $30.27 million or $0.60 per share from $32.07 million or $0.63 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.69 per share for the quarter. Analysts' estimates typically exclude special items.
Operating margin, or operating profit as a percentage of sales dropped to 16.1 percent from 16.3 percent last year.
Third-quarter effective tax rate was 33.9 percent, 3.0 percentage points higher than last year, driven primarily by a $1.0 million tax benefit related to the release of a valuation allowance at a foreign subsidiary in the third quarter of 2011 that did not recur in 2012.
Looking forward to the fourth quarter, the company expects earnings of $0.65 to $0.75 share. Analysts currently expect earnings of $0.78 per share for the fourth-quarter.
Clarcor also lowered its full year earnings guidance to a range of $2.35 to $2.45, from previous guidance of $2.50 to $2.65. The company also slashed its sales growth outlook for the year to a range of no-growth to 2 percent, from the prior range of 3 to 5 percent. Analysts currently expect earnings of $2.58 per share on revenues of $1.17 billion for fiscal year 2012.
CLC closed Wednesday's trading at $49.57, up $0.20 or 0.41%, on a volume of 0.3 million shares, on the NYSE. The stock, however, lost $1.67 3.37% in after-hours trade.
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by RTT Staff Writer
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