Carlisle remains cautious despite positive first quarter

ERJ staff report (RD)

Charlotte, North Carolina -- Carlisle Companies Inc.'s Engineered Transport Solution unit, which includes the company's speciality tyre and wheel activities, has reported 2010 first quarter (Q1) sales of $212 million, an increase of 4 percent compared to the same period last year.

Q1 year-on-year EBIT was down 16 percent to $13.6 million, due to lower selling prices, a 27 April Carlisle statement said.

Higher volume in the power sports and transmission belt product lines were partially offset by volume declines in the outdoor power equipment market. A Q1 EBIT margin of 6.4 percent declined from a margin of 7.9 percent in the first quarter of 2009, which included an insurance gain of $2.5 million, the statement added.

“We are continuing to make progress with the three previously announced tyre and wheel consolidations within the Engineered Transportation Solutions segment,” said Carlisle ceo, David Roberts.

“We completed the California wheel plant consolidations in December of 2009. We substantially completed the consolidation of our Buji and Meizhou, China tyre plants, but have experienced some production inefficiencies which we expect to have resolved no later than the end of the third quarter of 2010. Finally, we plan to complete the consolidation of the US tyre operations into the Jackson, Tennessee plant by the end of 2010,” he added.

Overall, total year-on-year Q1 company sales were up 5.8 percent to $562 million with income increasing 109 percent to $23 million, “due to lower raw material costs, organic sales growth and efficiencies gained through the Carlisle Operating System,” the company said.

Robert said that despite the strong first quarter, the company remains cautious in its full-year outlook. “We are experiencing escalating raw material costs that are expected to negatively impact future quarters. For the full-year 2010, we are planning for modest gains in revenue growth and EBIT margin improvement, aided by the continued implementation of the Carlisle Operating System. Our balance sheet remains strong, allowing us to focus on growing sales through market expansion, new product development and bolt-on acquisitions,” he said.

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Press release from Carlisle Companies Inc.