Carlisle Reports Reduced Q3 Net Income
Carlisle Companies Incorporated has reported net sales of US$832.5 million for the quarter ended September 30, 2008, a 14 per cent improvement over net sales of $730.4 million in the third quarter of 2007. Transportation product net sales were $205.2 million for the third quarter 2008, an increase of six per cent compared with net sales of $193.3 million in 2007. Softness in the consumer outdoor power equipment (OPE), high-speed trailer tyre and wheel, and styled wheel markets was offset by growth in the commercial OPE, ATV, and agricultural and construction tyre and wheel markets. Sales growth for specialised and pneumatic trailers more than offset continued softness in construction trailers, says the company.
Operating income was $81.8 million in the third quarter 2008 compared with $89.2 million in the third quarter of 2007. The decrease in operating income of 8 per cent was primarily due, says the company, to the combination of unrecovered raw material cost increases and a decline in unit volume within the Transportation Products and Applied Technologies segments. Operating income in the company’s transportation products business was $8.7 million in the third quarter of 2008 compared with operating income of $15.5 million for the same period 2007. Costs have increased for all of Transportation Products’ key raw materials, most notably for steel, natural & synthetic rubber and carbon black, says Carlisle, negatively impacting operating income. Operating income was also negatively impacted by reduced production due to a decline in market demand.
Net income for the third quarter 2008 was $50.4 million, or $0.82 per diluted share, compared to net income of $82.5 million, or $1.31 per diluted share, for the third quarter 2007. The decrease in net income was primarily due to the third quarter 2007 including an after-tax gain of $29.4 million related to the sale of interest in the European construction materials company, Icopal, on July 31, 2007. Also, the increase in raw material cost more than offset the sales growth in the current quarter.
Carlisle chairman, president and CEO David A. Roberts commented, “our third quarter sales grew in all segments but we did see several of our end markets experience reduced demand, most notably within the Transportation Products and Applied Technologies segments. Continued softness in consumer outdoor power equipment tyre and wheel sales, slowing demand for small construction trailers, a decline in core foodservice business and the impact of the continuing strike at The Boeing Company on the interconnect technologies business was more than offset by sales growth in construction materials, agricultural tyres, specialty trailers, healthcare foodservice products and off-highway brakes. With many of our end markets facing difficult challenges as a result of global economic conditions, we expect slowing in some of our markets and we do not expect any organic sales growth in the Construction Materials segment in the fourth quarter. We anticipate that our full year organic growth will be in the range of 4 per cent to 6 per cent.”