Columbus McKinnon’s second-quarter profits jumped by 24 percent, easily topping analyst forecasts, as the Amherst material handling equipment maker raised prices and cut its tax bill in half.
The price increases and improvements in productivity helped Columbus McKinnon offset unfavorable exchange rates and the impact of the sale of its crane business, which caused the company’s total sales to slip by 2 percent during the quarter.
The company said today its profits strengthened to $8.3 million, or 42 cents per share, from $6.7 million, or 34 cents per share, a year ago. The earnings easily topped the 37 cents per share that analysts were expecting.
Columbus McKinnon’s sales slipped to $146.5 million during the quarter that ended in September, compared with $149.9 million a year earlier. Most of the decline – $7.2 million – was due to unfavorable currency exchange rates, along with a $2.2 million drop in sales because of the sale of its Gaffey crane business in August. At the same time, the company’s revenues were bolstered by price increases and increased sales volume. Excluding the crane business sale and the currency exchange rate fluctuations, Columbus McKinnon’s sales would have increased by 4 percent.
The improved profits “reflect the continued improvements in productivity we are achieving,” said Timothy T. Tevens, Columbus McKinnon’s president and chief executive officer, in a statement.
The company also slashed its tax bill nearly in half, saving almost $1.4 million, because of a lower effective tax rate.
Tevens said the company’s U.S. markets, which account for 57 percent of its total revenues, were solid during the second quarter, although Columbus McKinnon is seeing some signs of slowing there. Columbus McKinnon’s European business is growing very slowly, with the company working on fewer projects as customers reschedule major investments, he said. Sales growth in Asia and Latin America ran at a 20 percent rate during the quarter, although those markets account for just 8 percent of the company’s overall revenues.
“We continue to see strong growth in emerging markets,” Tevens said.
The company’s backlog of orders dipped by 2 percent to $105.1 million at the end of September, compared with $107 million a year earlier.