Filtration products and service provider Clarcor Inc. (CLC), Wednesday said its third quarter profit declined 17.5%, due to lower sales reflecting currency fluctuations, as well as reduced demand, both in the U.S and overseas. The company's quarterly earnings failed to meet the analysts' expectations. Looking forward, the company lowered its earnings outlook for fiscal year 2009.
The Franklin, Tennessee-based company reported net earnings of $21.3 million for the third quarter, down 17.5% from $25.8 million in the prior year quarter. Earnings per share dropped 16% to $0.42 from $0.50 in the previous year quarter. On average, 6 analysts polled by Thomson Reuters expected the company to report earnings of $0.43 per share for the third quarter. Analysts' estimates typically exclude special items.
Operating profit for the quarter decreased 21% to $32.1 million from $40.8 million a year earlier.
Third quarter net sales declined 17% to $230.27 million from $276.30 million in the same quarter last year. Four analysts had a consensus revenue estimate of $246.40 million for the third quarter.
Foreign currency fluctuations decreased sales and the operating profit by about $7 million and $1 million, respectively, for the quarter.
For the second quarter, Clarcor reported net earnings of $16.8 million or $0.33 per share, and net sales of $229.4 million. The sequential improvement in earnings and sales was attributed to the cost reduction efforts, new product introductions and new customer relationships.
Segment wise, Engine/Mobile Filtration sales for the quarter fell 18% to $96.4 million, Industrial/Environmental Filtration sales slipped 17% to $114.6 million, and Packaging sales dropped 3% to $19.2 million from a year ago.
During the third quarter, Clarcor repurchased 688,200 shares of its stock at an average purchase price of $28.72. The company noted that about $167 million remains outstanding under its current share repurchase authorization.
For the nine-month period of 2009, Clarcor posted net earnings of $46.9 million or $0.92 per share, compared to $66.6 million or $1.30 per share in the previous year period.
Net sales for the year-to-date period declined 15.2% to $673.36 million from $793.62 million in the prior year period.
For 2009, Clarcor lowered its earnings oultook to a range of $1.30 to $1.40 per share from its prior estimate of $1.40 to $1.60 per share. The Street currently expects earnings of $1.44 per share for the year.
Commenting on the company's outlook, Norm Johnson, Clarcor's chairman and chief executive officer, said, "We are looking at several sales opportunities in South Asia and South America, but these will not have a material impact in the fourth quarter or in the first half of 2010. We expect the aftermarket to remain stronger than the OEM market for the rest of 2009 and throughout 2010. We also expect to report higher sales and operating profit in our fourth quarter this year than in any of the previous three quarters."
The company said it expects free cash flow to remain strong for the remainder of 2009 and into 2010.
Amongst others in the industry, Minneapolis, Minnesota-based Donaldson Co. Inc. (DCI) reported that its fourth quarter profit declined 51.5% from last year, hurt by restructuring expenses, and the negative impact of foreign currency translation. The company's outlook for fiscal 2010 was indicated to come in below Street expectations.
Columbus, Indiana-based Cummins Inc. (CMI) reported an 81% drop in profit for the second quarter, hurt by sharply lower demand for engines and power-generating equipment amid the global recession. Cummins reiterated its earnings and sales outlook for fiscal year 2009, even though it did not see any recovery in its markets during the year.
Clarcor shares closed Wednesday's regular trading session at $32.98, up 30 cents. However, in after-hours, the share lost 20 cents.
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