Cooper Industries Ltd.'s (CBE) first-quarter net income dropped
35% amid weaker-than-expected sales at the electrical products and
tool manufacturer.
That prompted the company to lower its full-year forecast and
give a second-quarter view below Wall Street's expectations.
The electrical products and tool manufacturer also said it cut
another 650 jobs in the quarter, on top of an expanded 2,200
layoffs in the fourth quarter. Cooper employs roughly 30,000
people.
Cooper now expects 2009 earnings of $2.30 to $2.60 and revenue
down 17% to 21%. The company's January view was a profit of $2.45
to $2.80 and sales down 10% to 15%.
For the second quarter, it expects earnings, excluding items, of
50 cents to 60 cents share on a revenue decline of 21% to 26%.
Analysts surveyed by Thomson Reuters were expecting 60 cents a
share on a revenue drop of 17% to $1.43 billion.
"While we are seeing some signs of stabilization in our markets,
we expect to continue to focus on rightsizing our businesses for
current market conditions," said Chairman and Chief Executive Kirk
S. Hachigian. He noted Cooper failed to receive its "normal"
seasonal boost in March as customers pared back inventory, driving
revenue below forecasts.
The company reported first-quarter net income of $100.1 million,
or 59 cents a share, down from $153.4 million, or 86 cents, a year
earlier. Excluding items including restructuring charges, earnings
from continuing operations fell to 47 cents from 81 cents.
Revenue fell 19% to $1.26 billion.
Cooper's January's projection was 45 cents to 65 cents on a
revenue decline of 10% to 15%, below Wall Street's estimates at the
time.
Gross margin fell to 29.6% from 33.9% amid the sales
decline.
Revenue in the company's key electrical products segment, which
includes circuit-protection equipment, lighting fixtures and wiring
devices, fell 17% as profit slumped 37%.
Cooper shares closed Wednesday at $29.16 and were inactive
premarket. The stock is down 40% the past eight months.
-By Mike Barris, Dow Jones Newswires; 201-938-5658;
mike.barris@dowjones.com;