Earnings Roundup: Stanley Black & Decker, Avnet, Timken, ITW and more - Modern Distribution Management

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Earnings Roundup: Stanley Black & Decker, Avnet, Timken, ITW and more

MDM looks at reports from Stanley Black & Decker, Avnet, Timken, Illinois Tool Works, MSA Safety Incorporated, Caterpillar and Saint-Gobain.
Earnings 3

Industrial distributors and manufacturers are reporting their 2022 third-quarter earnings and revised end-of-year financial outlooks. In this earnings roundup, MDM looks at 3Q reports from tool manufacturer Stanley Black & Decker; bearings and power transmission company Timken; industrial equipment producer Illinois Tool Works; safety products supplier MSA Safety Incorporated; construction equipment company Caterpillar; and construction materials supplier Saint-Gobain. We’re also looking at global technology solutions provider Avnet’s fiscal first-quarter 2023 earnings.

Stanley Black & Decker 3Q Revenues Jump 9% to $4.1B

Led by acquisitions in outdoor power equipment, strong industrial growth and price realization, New Britain, Connecticut-based Stanley Black & Decker reported 3Q revenues of more than $4 billion, a 9% increase over 3Q 2021, the company said Oct. 27.

“We made tangible progress in transforming our business during the third quarter as we improved customer fill rates, deployed a new organizational structure, implemented cost controls, and actively reduced our inventories,” said Donald Allan, Jr., Stanley Black & Decker’s President & CEO. “While the macroeconomic environment remains challenging, notably consumer and European demand weakness as well as cost inflation, there were relative bright spots with continued strength in professional construction and industrial customer demand, as well as incremental progress unlocking global supply chain constraints.”

The company’s Tools & Outdoor segment saw net sales increase 10% versus the same quarter last year, as the acquisitions of MTD and Excel, along with price, were partially offset by lower volume and currency. For 3Q, industrial net sales increased 5% versus last year, as price and volume were partially offset by currency and the Oil & Gas divestiture. Engineered Fastening organic revenues were up 15%, with growth in the aerospace, automotive and general industrial markets, Stanley Black & Decker said.

In July, the company said it completed the previously announced sale of most of its Security assets to Securitas AB for $3.2 billion in cash.

Avnet Fiscal 1Q 2023 Sales Reach $6.8B

On Oct. 26, Phoenix-based Avnet reported fiscal 1Q sales of $6.8 billion, a 21% increase over the same quarter a year prior. During the quarter, the company said its operating income of $291 million grew three times faster than sales.

“Our first quarter saw meaningful sales growth across all regions as demand in most of our end markets continued to be strong,” Avnet CEO Phil Gallagher said. “By delivering another quarter of solid sales and improved profitability, our team has once again demonstrated their ability to consistently execute given challenging business conditions. Although we can’t control the overall market, we are confident we can continue to deliver value to our supplier and customer partners despite uncertain market conditions.”

Operating income margin for 1Q was 4.3%, an increase of 129 basis points year over year, Avnet said.

Timken 3Q Sales Rise Nearly 10%

North Canton, Ohio-based Timken on Oct. 26 reported third-quarter sales of $1.14 billion, up 9.6% from the same quarter a year ago. Timken said the increase was driven primarily by growth across most end-market sectors led by industrial distribution and off-highway, and the impact of higher pricing, partially offset by unfavorable foreign currency translation. Organic sales were up 13.6% versus 3Q 2021.

The company said 3Q net income was $87 million, or $1.18 per diluted share. This compares to net income of $88.1 million or $1.14 per diluted share for the same period in 2021. Timken said the year-to-year decrease reflected the “net unfavorable impact of special items … higher operating costs and a higher tax rate, offset by positive price/mix and the favorable impact of higher volume.”

“Timken delivered excellent performance again in the third quarter, achieving double-digit organic revenue growth and solid year-over-year margin expansion,” said Richard G. Kyle, Timken President and CEO. “As we outlined at our recent Investor Day, our strong results reflect the successful execution of our strategy and proven business model, the diversity of our portfolio and attractive end-market mix, and our consistent and disciplined approach to capital allocation.”

Illinois Tool Works Revenue Jumps to $4B in 3Q

On Oct. 26, Glenview, Illinois-based ITW said 3Q revenue was $4 billion, a 14% increase over the same quarter last year. Organic growth for the quarter was 16%. ITW said its late-2021 acquisition of MTS Test & Simulation Business contributed 3% of revenue for 3Q 2022.

Five of ITW’s seven segments showed double-digit organic growth in the quarter, led by Automotive OEM (up 25%) and Food Equipment (up 23%). The company reported “record” operating income of $983 million for 3Q.

“Despite softening demand and inventory destocking in certain end-markets, the ITW team delivered another quarter of strong performance with organic growth of 16 percent, operating margin of 24.5 percent, after-tax ROIC of 29.9 percent and earnings per share growth of 16 percent,” said E. Scott Santi, Chairman and CEO.

MSA Safety Sees 12% Sales Gain in 3Q

Pittsburgh, Pennsylvania-based MSA Safety reported 3Q sales of $382 million, increasing 12% organically from a year ago on a reported basis and 16% on a constant currency basis.

“MSA delivered an excellent quarter in a challenging environment,” said Nish Vartanian, MSA Safety Chairman, President and CEO. “Our team’s dedication and focus on our customers resulted in strong sales growth, margin expansion, and cash flow generation.”  He added that the 16% constant currency increase in sales was broad-based across the product portfolio and consisted of both strategic pricing and volume expansion.”

For 3Q, operating income was $64 million, or 16.8% of sales, compared to $32 million or 9.5% of sales in the same period in 2021, MSA said.

Caterpillar 3Q Sales Increase 21%

Irving, Texas-based Caterpillar on Oct. 27 announced 3Q sales and revenues of $15 billion, a 21% increase compared with $12.4 billion in 3Q 2021. Operating profit margin was 16.2%, compared with 13.4% for the same quarter last year, the company said.

Third-quarter 2022 profit per share was $3.87, compared with 3Q 2021 profit per share of $2.60.

“I’d like to thank our global Caterpillar team for delivering another quarter of double-digit top-line growth and record adjusted profit per share,” said Chairman and CEO Jim Umpleby. “Our team remains focused on serving our customers as we continued to see healthy demand across most of our end markets during the third quarter.”

Saint-Gobain Outlook Confirmed as 3Q Sales Rise 19.6%

On Oct. 27, Saint-Gobain reported that 3Q sales were 19.6% above the same quarter in 2021, while 2022 sales overall were up 16.6% through the January-September period. The company said all segments experienced double-digit dynamic organic growth during 3Q 2022.

Saint-Gobain said the growth reflects ongoing optimization, in terms of both divestments — mainly distribution in the Netherlands, specialist distribution in the UK, Glassolutions in Germany, Austria, Denmark and the UK, and pipe in China — and acquisitions, which primarily included Chryso and Impac in Mexico in construction chemicals, Kaycan in exterior products in North America and Panofrance, a French specialist in modular timber solutions.

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