Safety and security specialist Federal Signal (FSS -0.28%) 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.
