Actuant reported strong results for the third quarter of fiscal
2014. Earnings increased 13% year over year to $0.70 per share,
while revenues grew 10% to $378 million. The Energy and Engineering
Solutions segments are progressing organically whereas Actuant's
acquisition of Viking SeaTech and Hayes are expected to be
accretive to the company's earnings in the coming quarters.
Further, Actuant's efforts to reduce outstanding shares are
expected to boost earnings per share in the quarters ahead.
However, the Industrial segment has not been performing well and is
expected to record a sales decline in fiscal fourth quarter.
Actuant's presence in various countries exposes it to many
geo-political risks. Moreover, the strategic acquisitions of the
company also pose certain integration risks. Based on these
factors, we prefer to have a balanced view and maintain a Neutral
recommendation on the stock.
Actuant Corporation (ATU) is involved in the designing,
manufacture and distribution of various industrial products and
systems for its clients in more than 30 countries. Founded in 1910,
the company is headquartered in Menomonee Falls, WI. The company
operated through four segments, prior to the divestment of the
Electrical segment in Dec 2013. The current segments are discussed
Industrial: The segment designs, produces and markets various
hydraulic and mechanical tools to general maintenance and repair,
industrial, infrastructure and production automation markets
through brands like Enerpac, Simplex, Precision Sure-Lock and
Milwaukee Cylinder. The tools help in enhancing productivity while
lowering labor costs.
Energy: The segment deals with technical products and services,
primarily joint integrity tools and connectors along with cable and
rope solutions, useful to the energy markets. These products reduce
customer downtime and increase safety and reliability in areas such
as wind turbines, refineries, fossil fuel etc. Popular brands
include names like Hydratight, Morgrip, Cortland and Jeyco, among
Engineered Solutions: The segment is a global leader in the
designing and assembling of industrial products and motion control
systems. The segment mainly targets the transportation markets with
products like hydraulic cab-tilt and latching systems through the
brands like Power-Packer, Gits and Power Gear Brands. Other
products of the segment such as, gearboxes, torque limiters, drive
shafts target markets like construction, forestry, aerospace and
Segmental revenues for fiscal 2013 are displayed in the chart
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