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Aeroquip-Vickers Expects Q3 Earnings to be Below Analysts' Estimate

16 September 1998

Aeroquip-Vickers Expects Third-Quarter Earnings to be Below Analysts' Estimates

    MAUMEE, Ohio--Sept. 16, 1998--Aeroquip-Vickers, Inc. announced today that it expects its third-quarter earnings to be below analysts' current estimates.
    Current analyst estimates, as reported on First Call, range from $1.00 to $1.11 per share. The company said that although the quarter is not complete, and events can occur which could cause actual earnings to differ from expectations today, it currently expects that third-quarter earnings per share will be between 80 cents and 87 cents.
    Aeroquip-Vickers has lowered its expectations due primarily to lower sales and unfavorable sales mix in Vickers' industrial and mobile business compared with a year ago. The quarter will be affected by a significant decline in higher margin distributor business in North America from a year ago, the continued economic turmoil in Asia-Pacific and the negative effect of changes in currency exchange rates. Third-quarter earnings will be further impacted by start-up costs for the new Greenwood, South Carolina, pump facility. Vickers has implemented cost-containment measures, including a reduction in the work force, that more closely align the expenses of its industrial and mobile business with anticipated demand.
    "Our aerospace and automotive businesses are continuing their strong performances in the third quarter," said Darryl F. Allen, Aeroquip-Vickers chairman, president and chief executive officer. "Based on booked business, we have a favorable earnings outlook for these businesses in 1999 as well."
    This release contains forward-looking statements that are based on internal estimates, preliminary information and management assumptions and are subject to a number of risks and uncertainties that are inherent in estimating future results. Moreover, such statements are also subject to continued demand in the aerospace and automotive industries and maintaining operating income margins.
    Aeroquip-Vickers, Inc. is two companies, Aeroquip Corporation and Vickers, Incorporated, world leaders in the design, manufacture and distribution of engineered components and systems to the industrial, aerospace and automotive markets.