Save Money in this Sunday's paper

comments

Carlisle Cos. reports 91% profit drop in 2Q

Charlotte-based Carlisle Cos. reported Tuesday a 91 percent decline in second-quarter profit as the company recorded a $100 million charge to lower the value of its transportation products segment.

The Ballantyne-based manufacturer’s earnings dropped to $8.2 million, or 13 cents per share, greatly missing the consensus expectations among analysts of $1.34. Profit in the year-ago period was $92.8 million, or $1.48 a share.

Net sales rose 1.2 percent, to $996 million, from a year ago. The company said its December acquisition of cable and wire provider Thermax/Raydex from St. Louis-based Belden helped boost sales 2.6 percent in the quarter.

But second-quarter income took a hit because of the $100 million impairment charge, which was the first topic CEO David Roberts discussed in an earnings call with analysts.

Roberts attributed the charge to a second-quarter rise in interest rates. The higher rates affected the way the company discounted projected cash flows in the transportation products segment, reducing that segment’s fair value, he said.

Roberts said the transportation products segment “has been a question mark” for the company. The segment produces, among other things, tires and wheels for the agriculture industry.

“During the second quarter, we decided that, despite our efforts to improve the margins at CTP (Carlisle Transportation Products), the probability of it becoming a consistent double-digit margin performer was going to be a challenge,” Roberts said. “Consequently, we deem that CTP is no longer a strategic asset.”

Carlisle has hired SunTrust Robinson Humphrey, part of Atlanta-based SunTrust Banks, to help it “explore strategic alternatives for CTP,” Roberts said.

Sales were up in the company’s construction materials and technologies segments but fell in the transportation products and brake and friction business lines.

Rain hurt construction materials and transportation products, the company’s two largest businesses.

“It was this wet weather that kept roofing contractors off roofs and farmers out of their fields,” Roberts said during the earnings call. “Both businesses lacked the growth we anticipated during our first quarter call.”

Among business lines, the biggest percentage increase in net sales was in the company’s technology segment that, among other things, manufactures cables and wires for the aerospace industry. Sales in that business grew 27 percent, to $145.7 million, from a year ago.

Carlisle shares rose 2.9 percent Tuesday to $68.10.

Roberts: 704-358-5248; Twitter: @DeonERoberts
Hide Comments

This affects comments on all stories.

Cancel OK

The Charlotte Observer welcomes your comments on news of the day. The more voices engaged in conversation, the better for us all, but do keep it civil. Please refrain from profanity, obscenity, spam, name-calling or attacking others for their views.

Have a news tip? You can send it to a local news editor; email local@charlotteobserver.com to send us your tip - or - consider joining the Public Insight Network and become a source for The Charlotte Observer.

  Read more



Hide Comments

This affects comments on all stories.

Cancel OK

The Charlotte Observer welcomes your comments on news of the day. The more voices engaged in conversation, the better for us all, but do keep it civil. Please refrain from profanity, obscenity, spam, name-calling or attacking others for their views.

Have a news tip? You can send it to a local news editor; email local@charlotteobserver.com to send us your tip - or - consider joining the Public Insight Network and become a source for The Charlotte Observer.

  Read more


Quick Job Search
Salary Databases