UPDATE 2-Actuant Q2 profit jumps; sees sales improving

Wed Mar 17, 2010 1:43pm EDT

* Q2 EPS $0.10 vs $0.06 yr-ago

* Sees Q3 adj EPS of $0.24-$0.29, rev $310 mln-$320 mln

* Sees improving sales trends in back half of 2010

* Says actively pursuing several acquisition opportunities

* Shares up 7 pct, touch new year-high (Recasts; adds conference call and analysts' comments, updates share movement)

By Fareha Khan

BANGALORE, March 17 (Reuters) - Actuant Corp's (ATU.N) quarterly profit more than doubled, helped by cost reduction measures, and the diversified manufacturer said it expects sales trends in all of its segments to improve in the second half of the financial year.

Shares of the company rose as much as 7 percent to a new year-high of $20.89.

Actuant -- which operates in the industrial, energy, electrical and engineered solutions markets -- said it is actively pursuing several "modest" acquisition opportunities that, when completed, would add to its earnings.

"Cash flow remains a positive, and Actuant's solid financial position enhances the possibilities for accretive acquisitions," BMO Capital Markets analyst Charles Brady wrote in a note to clients.

The company's focus on acquisitions will continue to be on the industrial and energy segments, analyst Robert Graham of Ladenburg Thalmann & Co told Reuters.

Actuant said its year-over-year earnings improvement in the second quarter came from electrical and engineered solution segments, and not from its higher margin energy and industrial segments.

Due to softness in the energy segment, Actuant launched restructuring actions during the quarter to reduce permanent cost, the company said on a conference call with analysts.

The company said it experienced sequentially higher sales in a number of its key end markets in the seasonally weak second quarter.

"We are optimistic that global industrial activity and the corresponding demand for our products and services will continue to improve through the remainder of the year," Chief Executive Robert Arzbaecher said in a statement.

Actuant would see its margins benefit as sales begin to recover, BMO Capital's Brady said.

For the third quarter, excluding items, the company expects earnings of 24 cents to 29 cents a share, on revenue of $310 million to $320 million.

Analysts on average were expecting earnings of 26 cents a share, on revenue of $309.1 million, according to Thomson Reuters I/B/E/S.

Q2 PROFIT JUMPS

For the second quarter ended Feb. 28, the company reported net income of $7.2 million, or 10 cents a share, compared with $3.2 million, or 6 cents a share, a year ago.

Excluding restructuring charges, it earned 19 cents a share.

The Butler, Wisconsin-based company, whose products range from plugs and sockets to precision control systems for automobiles, saw revenue rise slightly to $294.2 million.

Sales at the engineered solutions segment rose 23 percent to $89.4 million.

Analysts were expecting earnings of 16 cents a share, before items, on revenue of $286.5 million.

Shares of the company were trading up 5 percent at $20.50 Wednesday afternoon on the New York Stock Exchange. (Reporting by Fareha Khan in Bangalore; Editing by Anne Pallivathuckal and Maju Samuel)