Milacron posts 4% YOY decline in Q3 sales; to focus on cost reduction in Q4

Milacron Inc., a leading global supplier of plastics-processing technologies and industrial fluids, has posted a Q3-08 net loss of US$2.6 mln, or 93 cents/share, compared to a net loss of US$4.5 mln, or $1.36/ share in Q3-07. The profit improvement was a result of aggressive overhead cost reductions, which boosted operating earnings to US$6.5 mln for this quarter versus US$3.0 mln a year ago. Year to date, operating earnings have improved to US$14.5 mln compared to US$3.6 mln in 2007. Sales for Q3-08 stood at US$195 mln, down 4% compared to third quarter last year. New orders of US$191 mln declined 6% from same quarter last year, reflecting lower demand for plastics processing equipment in the automotive and construction industries in North America. Sales for company's machinery and related parts from North America, India and China remained flat versus the same period last year at US$92 mln, as depressed U.S. automotive and construction markets dampened sales of injection and extrusion equipment. However, sales of blow molding systems improved, as did injection machinery sales in Asia. For the company's European machine technologies segment, the declining demand for Europe for injection molding machines in Western Europe accounted for a sharp drop in segment sales to US$38 mln from US$46 mln in 2007. Blow molding machine shipments were flat. Milacron's Mold Technologies segment continued softness in both North America and Western Europe, much of it from the automotive sector while the company's Industrial Fluids segment posted an increase in sales due to currency translation effects accounting for two-thirds of the increase. However, the earnings for this segment slightly reduced as the timing of material cost increases outpaced pricing and other cost reduction initiatives within the quarter. The looming recession and global credit woes will lead to the company increasing its focus on cash conservation and cost trimming. The company expects Q4-08 sales and operating earnings, excluding additional restructuring charges, to hover at same level with that of Q3-08.
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