Cooper Industries Reports Third-Quarter Earnings of 97 Cents
24 October 2000
Cooper Industries Reports Third-Quarter Earnings of 97 Cents
HOUSTON, Oct. 24 Cooper Industries, Inc. today
reported third-quarter earnings per share of $.97 (diluted), a 9 percent
increase over last year's third-quarter earnings of $.89 per share. Revenues
for the third quarter 2000 grew 17 percent to $1.15 billion, compared with
$982.2 million for the same period last year. Operating earnings for the
third quarter 2000 increased over 16 percent to $169.1 million, compared with
$145.5 million for the 1999 third quarter. Net income for the third quarter
2000 increased 8 percent to $91.4 million, compared with $84.4 million for the
third quarter last year.
"During the quarter, revenues continued to grow at an accelerated rate
reflecting particularly strong demand for our electronic, telecommunications
and new lighting product offerings as well as the effects of recent
acquisitions," said H. John Riley, Jr., chairman, president and chief
executive officer.
"Our continuing actions to expand the markets and customers we serve are
paying dividends," continued Riley. "We are confident that our broadened and
more balanced business base and our aggressive actions to reduce costs will
buffer the Company's results even in times of economic uncertainty."
Diluted earnings per share for the nine months ended September 30, 2000,
rose by 8 percent to $2.85 compared with $2.63 for the same period last year,
excluding nonrecurring items. Nine-month 1999 earnings include $2.4 million,
or $.02 per share, of nonrecurring charges, primarily related to cost control
and asset rationalization programs.
Net income for the nine months ended September 30, 2000, grew 8 percent to
$268.2 million compared with $248.0 million for the same period in 1999.
Total revenues for the 2000 nine-month period grew 17 percent to $3.35 billion
from $2.86 billion for the same period in 1999. Operating earnings for the
nine-month period in 2000 increased 13 percent to $486.1 million, compared
with $430.2 million for the same period last year, excluding nonrecurring
items.
Electrical Products
Third-quarter 2000 revenues from the Electrical Products segment increased
22 percent to $957.3 million from $786.0 million for the third quarter 1999.
Third-quarter 2000 operating earnings for the segment increased 17 percent to
$156.9 million, compared with $133.8 million for the same period last year.
Aggressive cost management, strategic purchasing initiatives and other
productivity improvement programs continued to enhance profitability.
Excluding acquisitions, return on sales for the quarter for the Electrical
Products segment was 17.5 percent, compared with 17.0 percent for last year's
third quarter.
Revenues of Cooper's circuit protection business continued to grow at a
double-digit rate during the quarter spurred by new product offerings and
strong electronic and telecommunication sales. Revenues also grew at a
double-digit rate at Cooper's lighting business, reflecting modest price
increases for core products and the effect of recent acquisitions. Cooper's
European lighting and security operations also showed growth in the quarter as
a result of acquisitions. Revenue growth was more modest in the Company's
power systems business where improved demand for system upgrade equipment was
offset somewhat by lower sales of transformers and related equipment.
Additionally, delayed energy sector spending continued to influence the
performance of the Company's hazardous duty electrical products businesses.
The acquisitions of B-Line Systems and Eagle Electric, completed earlier this
year, performed very well during the quarter. Both businesses have further
upside potential through expanded penetration of higher growth markets and for
improved manufacturing and operating efficiencies.
For the nine months ended September 30, 2000, revenues from the Electrical
Products segment increased 22 percent to $2.76 billion, compared with
$2.27 billion for the same period in 1999. Operating earnings from the
Electrical Products segment for the 2000 nine-month period rose 15 percent to
$442.6 million, compared with $386.1 million for the same period last year,
excluding nonrecurring items.
Tools & Hardware
Third-quarter 2000 revenues for the Tools & Hardware segment were
$188.5 million, compared with $196.2 million for the same period last year.
While sales trends in North and Latin American hand tools markets were
encouraging, this was more than offset by lower worldwide shipments of
automotive assembly equipment. The effects of currency translation further
reduced revenues in the segment by 3 percent in the quarter. Third-quarter
2000 operating earnings for the segment were $20.8 million, compared with
$20.6 million for the same period in 1999, reflecting the results of the
continuing rationalization of these businesses. Excluding acquisitions,
return on sales for the segment during the third quarter 2000 were
10.9 percent, compared with third-quarter 1999 return on sales of
10.5 percent.
Revenues in the Tools & Hardware segment for the nine months ended
September 30, 2000, were $594.9 million, compared with $598.8 million for the
same period last year. Operating earnings for the year 2000 nine-month period
were $67.4 million, compared with $73.0 million for the same period last year,
excluding nonrecurring items.
"Cooper's performance during the quarter was another solid step towards
achieving our financial objectives for the year," said Riley. "Moreover, it
makes us even more confident that we have the ability to achieve substantial
long-term revenues and earnings growth for our businesses."
CONSOLIDATED RESULTS OF OPERATIONS
Three Months Ended September 30,
2000 1999
(in millions where applicable)
Revenues $1,145.8 $ 982.2
Cost of sales 773.1 664.4
Selling and administrative expenses 188.2 160.8
Goodwill amortization 15.4 11.5
Operating earnings 169.1 145.5
Interest expense 28.6 13.7
Income Before Income Taxes 140.5 131.8
Income Taxes 49.1 47.4
Net Income $ 91.4 $ 84.4
Net Income Per Common Share:
Basic $ .98 $ .90
Diluted $ .97 $ .89
Shares Utilized in Computation
of Income Per Common Share:
Basic 93.4 million 94.0 million
Diluted 94.1 million 95.1 million
PERCENTAGE OF REVENUES
Three Months Ended September 30,
2000 1999
Revenues 100.0% 100.0%
Cost of sales 67.5% 67.6%
Selling and administrative expenses 16.4% 16.4%
Operating earnings 14.8% 14.8%
Income Before Income Taxes 12.3% 13.4%
Net Income 8.0% 8.6%
CONSOLIDATED RESULTS OF OPERATIONS (Continued)
Additional Information for the Three Months Ended September 30
Segment Information
Three Months Ended September 30,
2000 1999
(in millions)
Revenues:
Electrical Products $ 957.3 $ 786.0
Tools & Hardware 188.5 196.2
Total $1,145.8 $ 982.2
Segment Operating Earnings:
Electrical Products $ 156.9 $ 133.8
Tools & Hardware 20.8 20.6
Total 177.7 154.4
General Corporate expense 8.6 8.9
Interest expense 28.6 13.7
Income before income taxes $ 140.5 $ 131.8
Three Months Ended September 30,
2000 1999
Return on Sales: (A)
Electrical Products 16.4% 17.0%
Tools & Hardware 11.0% 10.5%
Total Segments 15.5% 15.7%
(A) Adjusting for recent acquisitions, return on sales in 2000
was 17.5% for Electrical Products and 10.9% for Tools & Hardware.
Return on sales in 2000 for the total of the segments was 16.2%.
CONSOLIDATED RESULTS OF OPERATIONS
Nine Months Ended September 30,
2000 1999
(in millions where applicable)
Revenues $3,352.9 $2,864.4
Cost of sales 2,269.3 1,926.2
Selling and administrative expenses 554.0 473.7
Goodwill amortization 43.5 34.3
Operating earnings before
nonrecurring items $ 486.1 430.2
Nonrecurring charges --- 3.7
Interest expense 73.5 39.1
Income Before Income Taxes 412.6 387.4
Income Taxes 144.4 139.4
Net Income $ 268.2 $ 248.0
Net Income Per Common Share:
Basic $2.87 $2.64
Diluted 2.85 2.61
Shares Utilized in Computation
of Income Per Common Share:
Basic 93.5 million 94.1 million
Diluted 94.1 million 95.0 million
PERCENTAGE OF REVENUES
Nine Months Ended September 30,
2000 1999
Revenues 100.0% 100.0%
Cost of sales 67.7% 67.2%
Selling and administrative expenses 16.5% 16.5%
Operating earnings before nonrecurring items 14.5% 15.0%
Income Before Income Taxes 12.3% 13.5%
Net Income 8.0% 8.7%
CONSOLIDATED RESULTS OF OPERATIONS (Continued)
Additional Information for the Nine Months Ended September 30
Segment Information
Nine Months Ended September 30,
2000 1999
(in millions)
Revenues:
Electrical Products $2,758.0 $2,265.6
Tools & Hardware 594.9 598.8
Total $3,352.9 $2,864.4
Segment Operating Earnings
Without Nonrecurring Items:
Electrical Products $ 442.6 $ 386.1
Tools & Hardware 67.4 73.0
Total 510.0 459.1
Segment Nonrecurring Items:
Electrical Products --- 3.0
Tools & Hardware --- 1.5
Total --- 4.5
Segment Operating Earnings
With Nonrecurring Items:
Electrical Products 442.6 383.1
Tools & Hardware 67.4 71.5
Total segment operating earnings 510.0 454.6
General Corporate nonrecurring items --- (.8)
General Corporate expense 23.9 28.9
Interest expense 73.5 39.1
Income before income taxes $ 412.6 $ 387.4
Nine Months Ended September 30,
2000 1999
Return on Sales: (A)
Electrical Products 16.0% 17.0%
Tools & Hardware 11.3% 12.2%
Total Segments 15.2% 16.0%
(A) Before nonrecurring items and after acquisitions. Adjusting
for recent acquisitions, return on sales in 2000 was 17.2% for
Electrical Products and 11.2% for Tools & Hardware. Return on
sales in 2000 for the total of the segments was 16.0%.
CONSOLIDATED RESULTS OF OPERATIONS (Continued)
Additional Information for the Nine Months Ended September 30
Net Income Per
Net Income Diluted Common Share
2000 1999 2000 1999
(in millions where applicable)
Income before $268.2 $250.4 $2.85 $2.63
nonrecurring items
Nonrecurring items --- (2.4) --- (.02)
Net Income $268.2 $248.0 $2.85 $2.61
Contact: John Breed of Cooper Industries, Inc., 713-209-8835.