Cleveland-based Parker Hannifin Corp. said Wednesday a drop in sales and income in the quarter ended Dec. 31 made net income drop to $29.1 million, or 25 cents per share, from 2001's corresponding $78.3 million, or 68 cents per share.
The income fell short of the Wall Street consensus expectation of 33 cents, according to market researcher Thomson Financial/First Call.
The depressed market was cited in October by Parker Aerospace, an operating segment of Parker Hannifin, for laying off up to 170 of its 887 workers in Ogden. Those workers designed, manufactured and serviced primary flight and engine-control systems and components, actuators, and hydraulic systems and components for commercial aircraft. A plant in Irvine, Calif., handles the same work for the military.
Sales in the quarter totaled $1.44 billion.
"We're staying focused on our lean initiatives," Don Washkewicz, chief executive officer, said in a prepared statement. "In our acquired and base businesses, we made progressive moves during this downturn to improve operating efficiencies, especially consolidating and relocating product lines."
Excluding acquisitions, the company said revenue in its base business was down 14 percent compared to a year ago, reflecting lower volume in every segment, including aerospace. On the industrial side, North American sales were down 12 percent and international sales fell 7 percent.
"In both cases, operating income was substantially lower, with the most significant declines noted in what traditionally are the company's most profitable industrial markets, including factory automation, semiconductor manufacturing and telecommunications," the company said.
For the first six months of the fiscal year, the company had net income of $89.6 million, or 77 cents per share, on sales of $2.91 billion. A year ago, net income was $203.4 million, or $1.77 per share, on sales of $2.95 billion.
The company, with more than 45,000 workers in 45 countries, said it expects third fiscal quarter earnings to be between 48 and 60 cents per share, with full-year earnings expected to be between $2 and $2.30 per share.
"We have yet to see a sustained trend of improvement in industrial demand, but we do expect to see a gradual, sequential upturn in the third and fourth fiscal quarters," Washkewicz said. "And in aerospace, we're expecting military demand to begin to offset pressure on the commercial side."
Earlier this month, two firms cut their investment ratings for Parker Hannifin. Salomon Smith Barney cut the rating from "outperform" to "neutral," and H.C. Wainwright lowered theirs from "buy" to "accumulate."
The company's stock was priced at $44.95 early Wednesday, down 56 cents from Tuesday's close. In the past year, the price has ranged from $30.40 to $50.10.