Smith International announces record Q3 earnings
Motion Industries posts third quarter improvement
Cooper Industries records third quarter gains
Danaher Corp. generates record Q3 earnings
Income up 170 percent for Applied Industrial Technologies
Stanley Works reports financial gains in Q3
Parker Hannifin reports record quarterly sales and earnings
ITW generates record third quarter earnings
Grainger posts record earnings in third quarter
Barnes Distribution generates Q3 sales growth
Baldor Electric Co. posts sales, earnings increase
Eaton reports surge in Q3 sales, income
Fastenal reports third quarter gains

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Smith International announces record Q3 earnings
Smith International Inc. said third quarter revenues were $1.1 billion, an increase over $924.8 million during the third quarter last year. Net income reached a record $51.9 million, or 51 cents per share, compared to net income of $35 million, or 35 cents per share, a year ago.

For the first nine months of the year, Smith International generated revenues of $3.2 billion, up from revenues of $2.6 billion in 2003. The company reported net income of $124.2 million, or $1.21 per share, during the nine-month period, an increase over net income of $85.5 million, or 85 cents per share, during the prior-year period.

Smith's distribution segment, Wilson, posted revenues of $302.4 million in the third quarter, up from $237.4 million the year before. Operating income reached $7.3 million for the segment, up from $229,000 in 2003.

Wilson reported nine-month revenues of $841.3 million, an increase over revenues of $661.2 million in 2003. The segment recorded operating profit of $16.9 million during the first three quarters, compared to a loss of $4.3 million a year ago.

“The third quarter of 2004 was another solid revenue and earnings performance for Smith," said Doug Rock, chairman and CEO. "We anticipate a long line of continued, future year-over-year and sequential earnings improvements. Our confidence is supported by tight supply and demand fundamentals and our expectation that customer spending will accelerate further in 2005 and beyond.”

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Motion Industries posts third quarter improvement
Motion Industries Inc. reported third quarter net sales of $636.7 million, an increase over net sales of $557 million during the third quarter of last year. Its operating profit reached $40.9 million, up from $34.2 million during the third quarter last year.

For the first three quarters of the year, Motion Industries generated net sales of $1.9 billion, an increase over net sales of $1.7 billion during the prior-year period. Operating profit increased to $125.1 million during the period from $110.6 million the year before.

Motion Industries' parent company Genuine Parts Co. recorded third quarter net sales of $2.3 billion, up from $2.2 billion in Q3 2003. Net income reached $97.9 million, or 56 cents per share, an increase over net income of $88.3 million, or 51 cents per share, a year ago.

Genuine Parts Co. reported net sales for the first three quarters of the year of $6.8 billion, an increase over net sales of $6.4 billion. The company posted net income of $299.2 million, or $1.71 per share, compared to $247.4 million, or $1.42 per share, during the prior-year period.

"Sales and earnings for the third quarter reached record levels for the period and continued the positive pattern established early in 2004," said Genuine Parts Co. chairman Larry Prince. "We were again pleased to see growth in all our business groups providing balance to our results."

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For the first nine months of the year, revenues increased to $3.3 billion from $3 billion during the same period last year. Net income reached $250.9 million, or $2.65 per share, compared to $199.6 million, or $2.14 per share, a year ago.

In the tools and hardware segment, third quarter revenues were $188 million, a slight increase over $187.5 million in Q3 2003. Operating earnings reached $18.3 million, up from $9 million in the prior year.

For the first three quarters, tools and hardware revenue reached $542.3 million, up from $513 million the year before. The segment generated operating earnings in the first three quarters of $42.7 million, compared to $22.5 million last year.

"Looking ahead, pricing actions, our focus on low-cost manufacturing and strategic sourcing, and our investments in leading-edge business systems technology should allow us to successfully confront rising costs for raw materials, transportation and energy, costs which today are substantially higher than we anticipated at the beginning of 2004," said Cooper chairman and CEO H. John Riley Jr. "Likewise, new product introductions and ongoing programs to increase our global market share should broaden Cooper's customer base and generate solid incremental core revenue growth for our businesses."

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Danaher Corp. generates record Q3 earnings
Danaher Corp. recorded third quarter sales of $1.7 billion, an increase over sales of $1.3 billion during the third quarter last year. The company posted Q3 net earnings of $200.8 million, or 62 cents per share, up from net earnings of $138.6 million, or 44 cents per share, in 2003.

For the first three quarters of the year, Danaher generated sales of $4.9 billion, compared to sales of $3.8 billion in 2003. Net earnings reached $528.3 million, or $1.63 per share, compared to net earnings of $366.9 million, or $1.16 per share, the year before.

"We are again pleased to report record quarterly earnings," said H. Lawrence Culp Jr., Danaher president and CEO. "We are particularly pleased to report growth of 9 percent from existing businesses, also known as core revenues."

The tools and components segments delivered solid results, finishing the quarter with 10 percent and 7 percent core revenue growth, respectively. 

He added: "The strength we continue to see across our businesses through the first nine months of this year reinforces our confidence in our ability to deliver excellent results for all of 2004.”

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Income up 170 percent for Applied Industrial Technologies
Applied Industrial Technologies Inc. recorded fiscal first quarter 2005 net sales of $413.1 million, up from net sales of $361.1 million during its first fiscal quarter 2004.

The company generated Q1 net income of $13 million, or 65 cents per share, a 170 percent increase over net income of $4.8 million, or 25 cents per share, in the prior-year period.

"We were extremely pleased by our first quarter performance," said Applied chairman and CEO David L. Pugh. "The rebound of the industrial economy created strong demand for our products and services as industrial plants ran at an increasing rate of utilization. This strong demand coupled with our improved business strategies and more efficient operations helped us drive our operating margin to 5.2 percent, more than 100 percent higher than last year's first quarter."

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Stanley Works reports financial gains in Q3
The Stanley Works recorded third quarter net sales of $791.2 million, compared to net sales of $665.6 million during the third quarter of 2003. Net earnings increased to $63.9 million, or 76 cents per share, vs. net earnings of $41.7 million, or 46 cents per share, during the prior-year period.

For the first three quarters of 2004, The Stanley Works posted net sales of $2.4 billion, up from net sales of $2 billion during the first three quarters of 2003. Net earnings from the 2004 period reached $278.8 million, or $2.19 per share, compared to net earnings of $73.3 million, or 77 cents per share, last year.

"Our team delivered another solid performance, executing our strategy and achieving strong revenue growth, earnings and cash flow," said John F. Lundgren, chairman and CEO. "Our consumer hand tools business and eight industrial tools and security solutions business units -- fastening systems, industrial mechanics tools, industrial storage, specialty tools, laser measuring, assembly technologies, hydraulic tools, and access technologies -- achieved double-digit percentage organic sales increases this quarter."

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ITW generates record third quarter earnings
Illinois Tool Works Inc. reported third quarter operating revenues of $3 billion, up from operating revenues of $2.5 billion during last year's third quarter. Net income reached $330.1 million, or $1.09 per share, in the third quarter, up from net revenues of $268.9 million, or 87 cents per share, last year.

For the first nine months of its fiscal year, ITW posted operating revenues of $8.7 billion, an increase over revenues of $7.4 billion in 2003. The company generated net income of $980.6 million, or $3.19 per share, compared to net income of $740.4 million, or $2.44 per share, a year ago.

"Our strong financial results in the third quarter continue to underscore consistent customer demand in a number of North American and international end markets," said W. James Farrell, ITW chairman and CEO. "The growth of our base revenues, our active acquisition program and our 80/20 discipline gives us optimism for the fourth quarter and beyond."

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Parker Hannifin reports record quarterly sales and earnings
Parker Hannifin Corp. posted fiscal first quarter sales of $1.9 billion, up from net sales of $1.6 billion during its first fiscal quarter last year. Net income increased to $132.7 million, or $1.11 per share, compared to net income of $56.7 million, or 48 cents per share, in the prior-year period.

"We're encouraged by continued strength in the global economy and improvements we've seen in most segments of our business, including industrial international and the uptick in aerospace aftermarket," said Parker CEO Don Washkewicz. "Our main concerns at this point in the recovery are inflationary pressures from oil and raw material shortages and the prospects for higher interest rates."

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Grainger posts record earnings in third quarter
Grainger reported third quarter earnings per share of 74 cents, a 19 percent increase over the 62 cents reported in the 2003 third quarter, surpassing the previous record established in the 2004 second quarter.

Third quarter sales were $1.3 billion, up 8 percent vs. the prior year's third quarter. Net earnings were up 19 percent to $68 million, the highest net earnings for any quarter.

"Our results reflect how hard Grainger's employees are working to deliver outstanding service to our customers," said Richard L. Keyser, chairman and CEO. "It's this service together with an improved economy that has helped drive our performance. During the quarter, our redesigned logistics network continued to deliver productivity improvements and is on track to contribute $10 million to operating earnings this year."

The company raised its 2004 earnings per share guidance to between $2.80 and $2.90. Previously, guidance was $2.65 to $2.85.

Sales for the first nine months were $3.8 billion, up 8 percent vs. the first nine months of 2003. Net earnings increased 19 percent to $197 million vs. $165 million in 2003. Earnings per share increased 20 percent to $2.15 from $1.79.

Sales in the branch-based distribution segment increased 9 percent in the 2004 third quarter vs. the 2003 quarter. Sales in the U.S. were up 8 percent, due to strong sales in the manufacturing and commercial sectors.

Sales to government accounts were flat compared to the 2003 third quarter. Sales in the first three markets under the market expansion program (Atlanta, Denver and Seattle) grew by 14 percent in the quarter.

Sales processed through grainger.com increased 28 percent in the quarter to $160 million from $125 million in 2003.

The quarter also included sales of $12 million related to hurricanes in the Southeast, which added approximately 1 cent to earnings per share.

Sales in Mexico were up 20 percent in the quarter vs. the 2003 period, driven by a strengthening economy and the expansion of two branches.

A stronger Canadian economy fueled by its natural resources industry resulted in a 14 percent increase in sales, or 8 percent in Canadian currency.

Operating earnings for the quarter were up 12 percent, the result of higher sales and improved gross profit margins. Operating expenses rose 14 percent during the quarter, influenced by increases in variable compensation, benefits and spending for the company's initiatives. This includes two key technology projects: accelerating the implementation of SAP across the enterprise and upgrading the IT infrastructure in the branches.

Lab Safety Supply's sales for the quarter were up 9 percent, the result of an increase in the number of customer accounts and better customer penetration. Operating earnings were up 18 percent, the result of most operating expense categories increasing at a slower rate than sales.

Sales were up 2 percent for the quarter for integrated supply. Increased sales from 10 new contracts signed since last year's third quarter were partially offset by disengagements of two large customers late in 2003. Operating earnings for integrated supply were up 25 percent for the quarter due primarily to lower data-processing costs vs. the 2003 period.

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Barnes Distribution generates Q3 sales growth
Barnes Distribution reported net sales for the third quarter of $107 million, up from net sales of $103.8 million during the same period a year ago. The company, which is a segment of Barnes Group Inc., posted operating profit of $5.5 million, down from $7.4 million during the prior-year period.

For the first nine months of the year, Barnes Distribution generated net sales of $320.6 million, up from net sales of $302.3 million the year before. Operating profit reached $14.8 million, compared to $15.5 million during the first three quarters of 2003.

"Sales, particularly those within our strategic initiatives, improved solidly from a year ago. We've made good progress since June in improving our customer service level to reach our target range. Fastener availability remains challenging, however, so there is some additional work to be done," said Edmund M. Carpenter, Barnes Group president and CEO.

As a whole, Barnes Group reported net sales of $243.9 million during the third quarter, an increase over net sales of $222.2 million the year before. The company posted Q3 net income of $9.2 million, or 39 cents per share, compared to $9 million, or 38 cents per share, during Q3 2003.

"This was a record third quarter for sales," said Carpenter.

During the first three quarters of 2004, Barnes Group saw net sales increase to $743.1 million, up from $670.5 million during the comparable period. The company recorded net income of $30.1 million, or $1.26 per share, vs. net income of $26.1 million, or $1.21 per share, last year.

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Baldor Electric Co. posts sales, earnings increase
Baldor Electric Co. saw Q3 net sales increase to $168.8 million, 21 percent higher than net sales of $139 million reported for the third quarter last year. The company reported net earnings of $8.7 million, or 26 cents per share, compared to $6.1 million, or 18 cents per share, last year.

For the first three quarters of the year, Baldor Electric Co. generated net sales of $485.4 million, up from net sales of $414.9 million during the prior-year period. Net earnings increased to $24.6 million, or 74 cents per share, for the first nine months, compared to $18.2 million, or 54 cents per share, last year.

"Despite unprecedented increases in the costs of steel and copper, our two largest purchased components, we have been able to improve our profitability this year," said Baldor Electric president and CEO John McFarland. "This improvement is due to higher sales, productivity increases in our manufacturing plants, and better management of our administrative and selling expenses."

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Eaton reports surge in Q3 sales, income
Diversified industrial manufacturer Eaton Corp. reported third quarter net sales of $2.5 billion, up from net sales of $2 billion during the third quarter a year ago. The company generated net income of $170 million, or $1.13 per share, compared to net income of $107 million, or 72 cents per share, in the prior-year period.

For the first nine months of the year, Eaton posted net sales of $7.2 billion, up from net sales of $6 billion during the same period last year. Net income reached $465 million, or $3.07 per share, an increase over net income of $288 million, or $1.94 per share, a year ago.

"We anticipate that net income per share for 2004 will be between $3.95 and $4.05, and accordingly we anticipate that net income per share for the fourth quarter of 2004 will be between 98 cents and $1.08," said Eaton chairman and CEO Alexander M. Cutler. "Operating earnings per share, which exclude restructuring charges to integrate our recent acquisitions, are anticipated for 2004 to be between $4.10 and $4.20, with operating earnings per share for the fourth quarter of between $1.03 and $1.13."

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Fastenal reports third quarter gains
The Fastenal Co. reported third quarter net sales of $325.7 million, an increase over net sales of $258.3 million in the prior-year period. Third quarter net earnings reached $34.7 million, or 46 cents per share, up from net earnings of $23.3 million, or 31 cents per share, last year.

For the first nine months of the year, Fastenal generated net sales of $920 million, up from net sales of $743.3 million during the same time a year ago. The company posted net earnings of $97.7 million, or $1.29 per share, compared to $64.2 million, or 85 cents per share, the year before.

"As discussed in previous public statements, the company's long-term goal has been to continue opening approximately 10 percent to 15 percent new stores each year," the company said in its Q3 financial report. "In July 2004, the company increased the 2004 range to 13 percent to 18 percent in response to the current economic strength we are experiencing."

Fastenal also said it continued its customer service project (CSP) in 2004. The goals of this project include the expansion of the products stocked at each store site as well as a more consistent display theme at each of these store sites. On Sept. 30, 1,289 (or 86 percent) of Fastenal's stores were operating with the CSP layout and product selection.

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