Earnings Roundup: Avnet, Timken, MSA Safety, ITW, BlueLinx - Modern Distribution Management

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Earnings Roundup: Avnet, Timken, MSA Safety, ITW, BlueLinx

MDM looks at another round of earnings reports from industrial distributors and manufacturers.
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We’re in the midst of another quarterly earnings reporting period for publicly-traded industrial distributors and manufacturers. Read below to learn about the most recent sales and revenue numbers for companies MDM typically covers, including: Phoenix-based electronic components distributor Avnet (fiscal 3Q); North Canton, Ohio-based bearings manufacturer Timken; Pittsburgh, Pennsylvania-based facility safety products maker MSA Safety; industrial equipment producer Illinois Tool Works; and Atlanta-based building products distributor BlueLinx Holdings Inc.

Avnet Sales Slow to Flat Growth in Fiscal 3Q

On May 3, Avnet reported fiscal 2023 third-quarter net sales of $6.5 billion, an increase of just 0.4% over the same quarter a year ago. The earnings report for the January through March period shows Avnet’s quarterly sales growth slowed compared to its 14.5% year-over-year growth reported in fiscal 2023’s second quarter.

On a constant currency basis, sales increased 3.4% over the same quarter in fiscal 2022. Adjusted diluted earnings per share of $2.00, compared with $2.15 in the prior-year quarter. Adjusted operating income margin was 4.8%, which increased 15 basis points versus the same period last year.

“I am pleased with our results this quarter as our team delivered another quarter of year-over-year sales and operating margin growth,” Avnet CEO Phil Gallagher said. “We delivered record quarterly operating income in our Electronic Components business to help us achieve our stated goal of 5% operating margin. I am proud of our team’s dedication and commitment to continuously execute and deliver value to our customer and supplier partners.”

Timken 1Q Sales Rise 12.3% to $1.26B

On May 3, Timken reported first-quarter 2023 sales of $1.26 billion, up 12.3% from the same period a year ago. Timken said the increase was driven by strong organic growth in both the Engineered Bearings and Industrial Motion segments and the” favorable impact of acquisitions,” partially offset by unfavorable foreign currency translation.

Organically, 1Q sales were up 10.9% versus 1Q 2022. Timken posted net income in 1Q 2023 $122.3 million, or a record $1.67 per diluted share. This compares with net income of $118.2 million or $1.56 per diluted share for the same period in 2022.

Engineered Bearings sales were $900.7 million, an increase of 16.6% from the same period a year ago. Industrial Motion sales were $362.1 million, an increase of 2.8% compared with the same period a year ago.

“Timken maintained its strong momentum and delivered an excellent start to the year, achieving record revenue and earnings per share in the first quarter while expanding operating margins,” said Richard G. Kyle, Timken President and CEO. “Our performance continues to demonstrate the value we can create for our stakeholders through dynamic macro environments.”

MSA Safety 1Q Sales Jump 20%

On May 1, MSA Safety reported 2023 first-quarter net sales of $398 million, an increase of 20% on a reported basis and 22% on a constant currency basis.

The company reported gross profit of $181.4 million, compared with approximately $142.8 million in 1Q 2022. MSA also reported a net income loss of more than $150 million in 1Q 2023 because of a “one-time after-tax loss of $200 stemming from the divestiture of its subsidiary holding legacy liabilities.” Excluding that one-time loss, adjusted net profit was $54 million for the quarter.

“We had an outstanding start to the year, with our team delivering another quarter of double-digit revenue growth and strong incremental margins,” said Nish Vartanian, MSA Safety Chairman, President and CEO. “Our first quarter results reflect the breadth and depth of our leading portfolio of safety solutions as well as the diversification and resiliency of our end markets. Underlying the 20% quarterly sales increase was double-digit order growth and a book-to-bill ratio over 1.1. The continued strength in customer demand is encouraging, with broad-based expansion across our product categories and key regions.”

ITW Posts $4B Revenue in 1Q

On May 2, Glenview-based Illinois Tool Works (ITW) reported 1Q 2023 revenue of $4 billion, a 2% increase year-over-year with organic growth of 5%.

ITW had operating income of $972 million, up 9% year-over-year, and operating margin of 24.2%, an increase of 150 basis points from 1Q 2022. Earnings per share were $2.33, up 10% year-over-year.

“The ITW team delivered a solid start to the year as we continue to demonstrate the performance power of our proprietary business model and the resilience of our diversified high-quality business portfolio,” ITW Chairman and CEO E. Scott Santi said in a news release. “While the near-term economic outlook continues to be uncertain, I am confident that ITW remains well positioned to deliver best-in-class performance in any environment.”

BlueLinx 1Q Sales Fall 39%

On May 2, Marietta, Georgia-based building products distributor BlueLinx reported 1Q 2023 net sales of $798 million, down 39% year-over-year. Gross profit margin was $134 million, a decrease of 54% year-over-year, as the building materials and construction markets suffer amid a lack of demand for single-family housing. Gross profit margin fell 560 basis points to 16.7%.

Net sales of specialty products — which include engineered wood, siding, millwork, outdoor living, industrial products and specialty lumber and panels — decreased 26%. Net sales of structural products — which include lumber, plywood, oriented strand board, rebar and remesh — were down 57%.

“Our first quarter performance reflected the continued execution of our long-term strategy in a challenging market, guided by a continued focus on high-value specialty categories and operational, pricing, and procurement excellence across our distribution network,” BlueLinx President and CEO Shyam Reddy said in a news release. “Despite a decline in demand for building products across our industry since late last year, we worked hard to maintain both our price and cost discipline, resulting in solid margin performance, lower operating expenses and strong operating cash flow.”

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