You may have noticed that this earnings season has brought about a series of trends among the nation's larger industrial companies. While much of 2008 saw the companies held afloat by international sales amid slowing U.S. markets, the most recent period has been characterized by several phenomena:
- Lower year-on-year revenue numbers
- Significant cost reductions
- Sequential earnings improvements that exceeded expectations
- Lingering concerns about conditions in 2010
Looking at the company's six individual segments, Health Care, along with Display and Graphics, led the parade with increases in sales. The Safety, Security, and Protection Service unit suffered a sales decline of 2%, while its operating income rose by 9.8%, helped on by 27% operating margins and H1N1 respirator demand. That same demand also kept Kimberly-Clark
As CFO Pat Campbell noted during the company's call, "The respiratory factories have been running 24 hours a day, seven days a week since May of this year to keep up with demand, but we have been unable to significantly reduce our backorder volume levels."
At the same time, the other three operating segments -- Industrial and Transportation, Consumer and Graphics, and Electro and Communications -- watched their sales slide year-on-year, but all expanded versus the prior quarter.
It appears that those companies that have picked up steam in the quarter are those that adopted an approach early on in the downturn and stuck with it. As CEO George Buckley said on the call, he could "almost give you my second-quarter remarks here again, because Q3 was really all about continued execution of the plan, rather than any radical new pathway or strategy."
So now we'll wait for companies like Manitowoc
Fool contributor David Lee Smith doesn't have a position in any of the companies named above. ITT and 3M are Motley Fool Inside Value recommendations. Kimberly-Clark is a Motley Fool Income Investor pick. Try any of our Foolish newsletters today, free for 30 days. The Fool has a disclosure policy.