Many publicly owned electrical manufacturers released their second-quarter 2002 earnings reports in the last few days. As one would expect, the financial news wasn’t good, and many companies reported sales or earnings declines of 10 percent or more for the second-quarter 2002, compared to the same time period in 2001. In this batch of financial reports, CEOs for some of the largest companies in the electrical construction market had some sobering things to say about the economic outlook for the rest of 2002.
Timothy H. Powers, President and CEO, Hubbell Inc.
“While some economic indicators have turned positive, optimism is not yet apparent in the customers we serve or in industrial markets in general. Our assessment of the economic environment hasn't changed. The remainder of 2002 will be slow with continuing erosion in demand from commercial markets offsetting any industrial improvement.”
Don Davis, Chairman and CEO, Rockwell Automation
“We are anticipating a continuation of the current uncertain business environment in the near term and are thus assuming flat to modest sequential sequential sales growth.”
John Riley, Chairman, president and CEO, Cooper Industries
“It's now clear that the significant second-half recovery we expected to see in the markets we serve is simply not going to happen. Our own people and the industry consensus forecast now point to little if any recovery in our markets over the balance of the year.”
James McNerney, 3M chairman and CEO
“While there were signs of sales improvement in the second quarter, we remain cautious about business conditions for the remainder of 2002. The global economic landscape remains uncertain, and our operating plans will continue to reflect this view.”
Kevin Dunnigan, chairman and CEO, Thomas & Betts
“We were hopeful earlier this year that the economy would improve in the second half. While demand in our core markets has been reasonably stable, there have been very few signs that would indicate a recovery is imminent.”
Vincent Rego, CEO, Encore Wire, McKinney, Texas
Commenting on the first six months of 2002, Rego said, “Encore's results are remarkable in light of the present condition of our industry. We continue to maintain profits despite some of the lowest margins I have seen in all my years in this industry. From the data we are able to see, it appears that Encore is the only profitable company in the building wire business at this point. This type of predatory pricing cannot continue forever. Our low cost structure is getting us through these lean times and will leverage our earnings up when general conditions improve.”