Chief executive officers have a pretty good vantage point from which to view the industry's future economic fortunes. Unfortunately, the CEOs from several large, publicly held electrical manufacturers, distributors and an electrical contractor don't see any short-term improvement in the electrical market. The good news is that most of these CEOs who commented on their companies' third-quarter results don't expect business to soften much more over the next few months.
The following comments culled from the most recent batch of financial statements offer some interesting insight into the electrical scene.
John Riley Jr., chairman, president and CEO, Cooper Industries
“At this point, we have no reason to be optimistic regarding fourth-quarter economic conditions. We have seen few signs of significant upturn in any of our markets, and activity in the commercial construction sector is likely to deteriorate even further over the near term. The broad-based economic recovery industrial America keeps hoping for has yet to materialize. Despite the persistently sluggish and volatile economy, we are continuing to aggressively invest in important sales and marketing and new-product development initiatives to stimulate growth and increase market share.”
Larry Powers, chairman, president and CEO, Genlyte Group Inc.
“The outlook for the fourth quarter is that the overall business will remain soft. We also expect some softness in the residential market, compounding the weakness in the commercial and industrial construction markets. We continue to aggressively pursue revenue opportunities in the relatively strong market segments, such as schools and government projects. Nevertheless, I believe the fourth quarter as well as most of 2003 will be very challenging.”
Timothy H. Powers, president and CEO, Hubbell
“Over the next two-to-four quarters, industrial markets are likely to remain flat to current levels, and nonresidential construction will probably weaken somewhat. The utility markets will remain slow as that industry struggles with questions of financing and return on infrastructure investment, while waiting direction from federal energy policy. Nonetheless, our goals for 2003 include a substantial gain in top-line growth with a full year of Hubbell's expanded lighting operations, a 100-basis point increase in operating margin in each of our segments and a bottom line improvement in excess of 10 percent.”
David Hughes, chairman and CEO, Hughes Supply Inc.
“While we expect the business climate to remain very difficult in the shorter term, we believe our future operating results will continue to benefit from the programs we put in place over the last 15 months.”
Roy W. Haley, chairman and CEO, WESCO International Inc.
“We have been placing a high priority on protecting and improving our base business. Since we don't anticipate significant near-term improvement in general economic activity, this strategy of focusing on operational capabilities will continue into 2003.
“Even though we've pulled out of a specialty international parts supply business in the Middle East, we don't currently expect to exit other markets or close additional branches. We have opened several new branches to support new customer activity, and are increasing local market and national scope marketing activities, delivering new sales training programs to our sales organization and introducing new products through trade show programs and specialty catalogs.”
Kevin Dunnigan, chairman and CEO, Thomas and Betts Corp.
“We continue to execute our plan of turning around Thomas and Betts despite having received no help from the economy. Operationally, our electrical business is substantially stronger today than when we began the manufacturing restructuring program late last year. When demand strengthens in our core electrical markets, the full benefit of these efforts should be clearly evident.”
Roddy Allen, IES president and CEO, Integrated Electrical Services Inc.
“Although we have seen signs of improvement in our fourth quarter, the economic outlook for 2003 is still somewhat uncertain.”
Philippe Lemaitre, president and CEO, Woodhead Industries Inc.
“Our financial performance in fiscal 2002 reflected a worldwide industrial marketplace that continued to contract. However, during the year we maintained our focus on cost controls and continued to position the company to take full advantage of the growth potential within our Connectivity business segment when the economy recovers.”