In a recent blog post, our publisher commented on the state of the fluid power industry, saying that the market is strong and stable. It's nice to hear this and nice to know it's true, working in the industry every day and speaking to business owners, designers, users and engineers. But for those that are looking for some hard numbers, let me just review a few market/economic news stories I stumbled across my RSS feeds this morning.
First came the news from Eaton Corp. that it once again had record sales, with net income per share of $0.91 for the first quarter of 2012, an increase of 10% over the first quarter of 2011. Sales in the quarter were a first quarter record of $4.0 billion, 4% above the same period in 2011. Net income was $311 million, up 8% over the first quarter of 2011.
According to Alexander M. Cutler, Eaton chairman and chief executive officer, “We entered 2012 expecting it would be a year of subpar global economic growth, leading to approximately 5% growth in our markets. We continue to believe that for the full year markets will grow 5%, but we now believe the rate of growth in our U.S. markets will be higher than originally expected and the rate of growth in our non-U.S. markets will be lower than originally expected.
“For full year 2012, we expect another record year, with revenue growth of 7½% and operating earnings per share growth of 14%,” said Cutler. “These growth numbers represent strong performance in an uncertain global growth environment.”
While most of its business segment results were strong, its hydraulics segment sales were $735 million, an increase of 7% compared to the first quarter of 2011. Global hydraulics markets increased 4% in the quarter compared to the first quarter of 2011. Operating profits in the first quarter were $109 million. Excluding acquisition integration charges of $1 million, operating profits were $110 million, an increase of 4%. The company recently announced two overseas acquisitions in Turkey and South Korea.
“The hydraulics markets in the first quarter grew about as expected,” said Cutler. “Our bookings in the quarter declined 15 percent from the first quarter of 2011, as bookings in the first quarter last year reflected orders placed by OEM customers to rebuild their order backlog with suppliers. For all of 2012, we now believe hydraulics markets will grow by 5%, up 1% over our previous estimate."
This comes just a couple weeks after market analysts rated Eaton a good buy. A few days after this stock market tip about Eaton, came several pointers recommending Sun Hydraulics, one of the industry's largest manufacturers of cartridge valves. As Forbes pointed out, Zacks.com gave Sun Hydraulics a #1 Strong Buy rating, after the company posted five of six positive earnings in a row.
I'm sure over the next few weeks, we'll see similar news from other big market players, such as Parker Hannifin and Bosch Rexroth, as we usually do. But the best part of my internet search had me find a nice gem of an article about Hyspeco, a small Wichita, Kan.-based distributor and repair house. It highlighted how that company recently received an award as it too saw a big jump in sales.
I'd never heard of Hyspeco but I'm glad to see the little guys are doing well as the fluid power market rebounds, and the big players aren't taking up all the market share, so congrats to the folks at Hyspeco!
After the hard hit we took at the end of 2009 and early 2010, it's nice to see the rebound. I hope to see this trend continue and welcome more good news each day.