Electrical Marketing's LiveWire

People in the electrical industry have been making the ROI and environmental cases for energy-saving lighting retrofits forever, but the pitch often falls on deaf ears when it gets to the finance chiefs. Maybe it will be more compelling coming from one (or two) of their own.

Matthias Grossmann, CFO of Siemens Financial Services, and Jean-Paul Michel, CFO of Osram Sylvania (also part of Siemens), co-wrote a piece that appears on GreenBiz.com today, promoting lighting retrofits as a way for companies to improve their bottom line while promoting their commitment to reducing their impact on the environment.

The piece runs through a couple of case studies where clients were able to save bundles of money and abate tons of carbon emissions by swapping out lighting throughout their facilities, then cites a recent study showing U.S. CFOs are far less committed to investments in greening their facilities than their counterparts in other countries.

“…bringing the operations back into the black can start with helping the companies become more green,” write Grossmann and Michel. “It’s a twofer that really should be a no-brainer.”

Lighting: A Path to a Greener Bottom Line

While distributor still have some tough months ahead of them, most sectors of the economy -– with the notable exception of non-residential construction — have pretty much bottomed out. That’s one of the key takeaways from an economic forecast given by Alan Beaulieu, president, Institute for Trend Research, Bascawen, N.H., at the 2010 Executive Summit of the National Association of Wholesaler-Distributrors (NAW), in Washington, D.C., held Jan. 26-28 at the Fairmont Hotel.
“Inventory replenishment is starting,” he said. “2010 is that rocky bottom where the second half is better othan the first. Commercial construction will have to wait until 2011.”
In the not-so-good-news department, he expects inflation to hit 6.5% in 2011, but expects it to stick around the 3.5% mark this year. “Inflation is coming, and it will show up in commodities first.”
Because of his concerns about inflation, he urged meeting attendees to make their capital equipment expenditures and/or building purchases in 2010, before prices go up. Beaulieu will be providing independent manufacturers’ reps and electrical manufacturers with a forecast at next month’s NEMRA Annual Conference in New York.

NEMA’s Electroindustry Business Confidence Index (EBCI) for current North American conditions rebounded in January, rising nearly nine points to 57.1 points. The index is derived from responses to a survey circulated to senior executives of the National Electrical Manufacturers Association (NEMA), Rosslyn, Va. A value above 50 points indicates that more respondents reported that the business environment improved from the previous month than reported that it worsened. The index had fallen below 50 points in December for the first time in five months, but this latest reading suggests that the modest improvements in conditions that characterized much of the second half of 2009 have persisted into early 2010.

Moreover, the EBCI for future North American conditions pushed further upward in January while posting its second consecutive monthly gain. Rising 14.3 points to 78.6 points, the index recorded an eleventh straight reading above 50 points, and reached its highest level since December 2004. This result reflects widespread sentiment that business conditions will improve over the next six months. Full report

It was a tough year for WESCO Distribution Inc., Pittsburgh, with 2009 consolidated net sales declining 24.3%, to $4.6 billion from $6.1 billion, and net profits declining 49%. Said John Engel, WESCO’s CEO, “We successfully closed a very challenging year having taken quick and decisive actions resulting in operating cost reductions of $140 million. The economy appears to be in the bottoming process as we have experienced two consecutive quarters of stable sequential sales and margins. We are beginning to see signs of positive momentum in certain end markets with continued pressure in non-residential construction and utility. Overall, our 2009 performance was favorable compared to the last economic downturn and demonstrates the improvements made to our business.” Pittsburgh Business Times
Company press release

Hubbell Inc., Orange, Conn., reported its 4Q results, which included its Burndy acquisition. Net sales in the fourth quarter of 2009 were $591.9 million, a decrease of 9% compared to the $652.1 million reported in the fourth quarter of 2008. Net sales for the full year 2009 were approximately $2.4 billion a decrease of 13% compared to 2008. Operating income was $294.7 million, or 12.5% of net sales, compared to $346.0 million, or 12.8% of net sales, for the comparable period of 2008. Net income for the full year 2009 was $180.1 million, a decrease of 19% compared to the $222.7 million reported in 2008.
Timothy Powers, chairman, president, and CEO, expect the weak non-residential construction to struggle again in 2010. “During the fourth quarter, weak market trends continued as expected, he said. “In our Electrical segment, the U.S. non-residential construction market continues to experience significantly lower construction spending and tighter credit markets for commercial projects. The industrial maintenance and repair markets appear to be turning up from historically low levels as capacity utilization rates have started to increase. The residential market continued to show signs of bottoming, aided by the federal tax credit for first time homeowners which has increased demand. In our Power segment, demand was lower for our products due to restrained capital spending by utility companies as electricity usage declined.” Details

Rockwell Automation, Milwaukee, reported its results for the first fiscal quarter of 2010, showing a 10 percent decline in revenues from the same quarter in 2009 and a 32 percent decline in income, which outperformed expectations and spurred a rally in the company’s shares today.

The company’s first quarter 2010 revenues were $1,067.5 million, compared to $1,189.2 million in the first quarter of fiscal 2009. Income from continuing operations was $77.8 million, compared to $115.6 million.

Keith Nosbusch, Rockwell’s chairman and chief executive, sees cause for optimism over the coming year. “Our first quarter performance and continued improvement in the global economy seem to indicate that we are at the early stage of a recovery. However, high unemployment, historically low levels of capacity utilization and a very cautious capital spending outlook create uncertainty as to the shape of the recovery in manufacturing. Given our improved revenue baseline, we are revising our full year fiscal 2010 earnings per share guidance to $2.00 to $2.40 on a revenue range of $4.4 billion to $4.6 billion.”

Rockwell earnings release

The U.S. wind industry broke all previous records by installing nearly 10,000 megawatts (MW) of new generating capacity in 2009 (enough to serve over 2.4 million homes), an increase of 39 percent, but U.S. wind turbine manufacturing declined from the previous year, the American Wind Energy Association (AWEA) said today in its Q4 report.

The association had anticipated a drop as large at 50 percent in manufacturing, but the boost in funding from the American Recovery and Reinvestment Act (ARRA) helped reduce the economy’s impact on turbine production. Yet, the lack of long-term energy policy continues to blunt the sector’s growth, the association said.

Wind was surpassed only by natural gas in new electricity production capacity added, and the two together account for 80 percent of the increased power available. Total U.S. wind-generated power surpassed 35,000 MW in 2009.

Details

Cooper Industries announced that its Electrical Products Division segment saw revenues for the fourth quarter of 2009 decrease 18.8 percent to $1.1 billion, compared with $1.36 billion in the fourth quarter 2008. Total 2009 revenues for this division decreased 21.6 percent to $4.51 billion, compared to $5.76 billion for last year. Segment operating earnings for 2009 declined to $638.2 million excluding restructuring and asset impairment charges, compared to $930.3 million in the prior year. Details