Actuant Corp. (ATU), a manufacturer of products and systems, Wednesday reported lower profit for the second quarter, as sales dropped in the seasonally weak period amid subdued activity in the industrial markets. Further, citing the economic environment, among others, the company cut its full year view.
Net earnings declined to $28.44 million from last year's $32.18 million. Earnings per share dropped to $0.38 from $0.43. On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.37 per share for the quarter. Analysts' estimates typically exclude special items.
Consolidated sales for the quarter slid 2 percent to $370.37 million from $378.02 million, as core sales declined 6 percent even though acquisitions contributed 4 percent. Analysts had a consensus revenue estimate of $365.56 million for the quarter.
Robert Arzbaecher, CEO, said, "We delivered results for the second quarter at the high end of our sales and EPS guidance. During the normally seasonally weak quarter, we experienced generally subdued activity in the global industrial markets reflecting both cautious spending and continued destocking initiatives by OEM customers.''
Industrial segment sales rose 1 percent to $99 million and core sales growth of 1 percent reflected higher global Integrated Solutions activity.
Engineered Solutions segment generated $121 million, down 2 percent from last year. Excluding a 10 percent benefit from acquisitions, year-over-year core sales declined 12 percent. According to the company, the division's sales in the quarter continued to be impacted by OEM destocking in the heavy-duty truck, off-highway equipment and auto markets.
Energy segment sales grew 2 percent to $81 million. Excluding a 3 percent impact from acquisitions, core sales slid 1 percent from last year.
Electrical segment sales fell 9 percent to $70 million, amid lower solar inverter shipments and industrial transformer demand.
Despite economic conditions remaining weak in most end markets and regions, the company expects seasonal and core growth in the second half of the fiscal year.
The company expects third-quarter earnings per share to be in the $0.63- $0.68 range compared to $0.60 in the prior year. Sales are estimated to be in the range of $410 million - $420 million.
Wall Street expects the company to report earnings of $0.67 per share on revenues of $441.42 million for the third quarter.
Further, citing the economic environment, first half performance, and the divestiture of an approximate $7 million product line last week, Actuant said it has modestly adjusted its full year 2013 earnings per share guidance to $2.15 - $2.25 and sales projection was revised to $1.575 billion to $1.600 billion. Analysts expect the company to report earnings of $2.18 per share on revenues of $1.61 billion for fiscal 2013.
While announcing the first-quarter results, the company had maintained its forecast for earnings in a range of $2.20 to $2.30 per share, but believed that the probability of attaining the high end of the range was low if current economic conditions and uncertainty continued. The company had expected annual sales of $1.600 billion to $1.625 billion.
The company now expects full year 2013 core sales to decline 3 percent to 5 percent from the previous negative 1 percent to 3 percent.
ATU closed on Tuesday at $31.53.
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