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Thomas & Betts Up 12 Percent for Quarter

Posted on: Thursday, 27 October 2005, 21:00 CDT

By Jane Roberts, The Commercial Appeal, Memphis, Tenn.

Oct. 26--Sales at Thomas & Betts Corp. improved more than 12 percent in the third quarter, a sign of the company's expanding breadth and pricing strategy.

The company reported earnings of $34.8 million -- or 57 cents a diluted share -- up from $33.4 million or 56 cents a share a year ago, which included a pretax gain of 14 cents tied to the sale of a European joint venture.

"Solid sales momentum in most of our markets and continued productivity improvements combined to deliver very strong earnings performance," said president and chief executive Dominic Pileggi.

The increase, coupled with broader sales across all divisions and the need to rebuild the electrical infrastructure along the Gulf Coast, prompted T&B to raise its earnings guidance for the year to $1.95 to $2, up from the $1.77-1.82 range it projected July 25.

Companywide, sales rose $47.9 million to $442.1 million, with $42 million coming from its electrical division, the largest division in a company, that traces its roots to 1898 when two Princeton University engineers -- Robert M. Thomas and Hobart D. Betts -- sold conduit to the electrical distributors lighting up New York City with incandescent bulbs.

The division sold $5 million of electrical components to customers on the coast after Hurricane Katrina and expects another $5 million in similar sales in the fourth quarter.

Today, T&B also includes a steel structure division, which manufactures transmission towers, and a heating and ventilation division.

More than 6,000 electrical, industrial, specialty and retail distributors stock and sell Thomas & Betts products, including Home Depot, the company's largest mass marketer.

"If you look at the many legs of business -- manufacturing, light construction, utilities -- they're all very healthy," said Morgan Keegan analyst Brent Rakers.

He credits the management team for the company's success in passing on energy price increases without losing sales.

"Thomas & Betts is growing faster than the top-line rates in the overall industry. They are gaining market share."

Steel structure sales in the quarter were up 9 percent over last year, partly due to the additional capacity T&B gained when it purchased Southern Monopole in Birmingham, Ala., in January.

This is the first quarter the plant was fully integrated, spokeswoman Tricia Bergeron said.

"We were at the point of having to add machinery in another facility. Instead, we were able to buy this business," she said.

In the three years after the Enron scandal, the nation's utility companies were forced to review policies and quit spending, she said.

At the same time, a new T&B management team was sizing up the business, cutting back and laying off workers to survive.

"They've orchestrated a successful turnaround," Raker said. "Now they are doing a good job of transitioning from turnaround to growth."

The Energy Policy Act of 2005, signed into law this summer, should help over the long term.

It provides incentives for utilities to invest in transmission and calls for national reliability standards that will require investment in the electrical infrastructure.

T&B employs 9,000 people around the world, including 2,200 at five sites in the Mid-South and its global headquarters at 8155 T&B Blvd. in Memphis.

Stock closed at $37.40, up 8.4 percent.

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Copyright (c) 2005, The Commercial Appeal, Memphis, Tenn.

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TNB, HD,

Source: The Commercial Appeal

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