Safety and security specialist Federal Signal (NYSE:FSS) gave a strong signal to investors this morning although revenue came up light compared to estimates and GAAP earnings were short as well. However, on an adjusted basis profits beat expectations.
A top-line number of $199.8 million came in just below the Capital IQ analyst consensus view of $201.4 million while per-share losses of a penny missed Wall Street's estimate of a dime per share in profits. But income from continuing operations was $0.12 a share, 50% higher than the year-ago effort and ahead of the $0.10 consensus outlook.
Despite weak international demand that caused orders to fall 14%, Federal Signal CEO Dennis J. Martin said: "Our long-term trend of expanding margins continued in the first quarter as the company delivered 6.1% operating income margin, led by the environmental solutions group. This performance marked a significant improvement over the prior year period."
Total orders were down $22.7 million, or 18%, compared to the year-ago period as U.S. orders fell 13%, primarily due to decreases in orders for vacuum trucks, municipal sewer cleaners, and municipal street sweepers. Non-U.S. orders decreased $10.5 million compared to the prior year. The prior-year period benefited from a large order from a customer in the Asia Pacific market.
Fire rescue sales were also down in the period, but safety and security systems were up 2.2% Yet Federal Signal's environmental business comprises 56% of the total and served as a drag on the whole.
Headquartered in Oak Brook, Ill., Federal Signal has been in operation since 1901 and had more than $803 million in revenues in 2012.
Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.