Nortek reports sales decline, loss in 3Q

NORTEK INC. said market rumors dragged down earnings in the third quarter.
NORTEK INC. said market rumors dragged down earnings in the third quarter.

PROVIDENCE – Nortek Inc. reported lower revenue and a loss for the third quarter that ended Sept. 26, blaming market rumors due to an unsolicited proposal to acquire the company for dragging down business.
Nortek’s revenue was $618.5 million, a 3.8 percent decline from the prior year quarter’s revenue of $642.9 million.
The loss for the quarter was $14.4 million, or 90 cents per diluted share, compared with profit of $4.6 million, or 29 cents per share, in third quarter 2014.
In a statement, Nortek President and CEO Michael J. Clarke said that “solid performance” in the custom air, ergonomics and air quality segments was offset by lower sales and profitability in HVAC and security.
“During the quarter, we believe that the receipt of an unsolicited proposal to acquire the company, related market rumors and activity related to the company’s review of strategic alternatives had a negative impact on our business, employees and customers, primarily in our HVAC segment and to a lesser extent in our security and custom air segments,” Clarke said.
“We have ended all such activity, and we are working to put the uncertainties and distractions related to this issue behind us. Rebuilding our momentum in the company, particularly in HVAC, will take some time.”
As a result, he said the company has revised its full-year financial guidance, expecting net sales between $2.5 billion and $2.515 billion.
Despite the effects of market rumors, Clarke said custom air operating earnings and margins “were up substantially year-over-year, reflecting the positive impact of our operational improvement initiatives.” He said air quality sales also rose, thanks to the introduction of an “important new bath fan product platform.”

Clarke said the company is working to win back HVAC customers, and said the HVAC operation in Mexico is expected to continue to improve the segment’s cost position.

No posts to display