HVACR Business

MAR 2014

Help hvacr contractors master the critical components of business management.

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HVACRBUSINESS.COM 8 HVACR BUSINESS M A RC H 2 0 1 4 A lthough a report from the Federal Reserve at the start of our session showed that industrial production grew by 3.5 percent in the fourth quarter of 2013, that report was not refected in the stock market, which was all about nega- tive terrain. As our trading session ended on February 14, 2014, national markets began improving, but not enough to pull stocks out of their slump. A report from the Commerce Department showed a slowdown in December homebuilding, but the full year was the best since the housing bubble burst. Emerging mar- kets scared investors after a preliminary survey of a purchasing managers' index of Chinese manufacturing dropped to 49.6, the lowest reading since July; any number below 50 indicates contrac- tion. The Thomson Reuters/University of Michigan consumer sentiment index was 81.2, down from 82.5 last month, but up from the reading of 80.4 two weeks ago. The Federal Reserve also cut its stimulus program by another $10 billion, sending more tremors into an al- ready unsettled market. The Commerce Department reported that cold weather also knocked retail back: sales fell 0.4 percent in January. Investors returned to earnings after spending time ponder- ing emerging markets and bad weather; acquisitions also bolstered the market. "It seems a little too soon for [stocks] to have worked their way through this yet," said Barry Knapp, the head of U.S. equity portfolio strategy at Barclays. "We don't think the uptrend is going to resume right away. Stocks will probably still struggle a bit in the frst half of the year." The HVACR Business Stock Index fell 33.69 points, or 2.54 percent, and closed at 1291.87. Declining issues over- powered advancing issues by a 23-to-7 count. Parker-Hannifn tumbled 11.11 points, or 8.62 percent this session, af- ter missing estimates. For its fscal 2014 second quarter, PH posted net income of $253.4 million, or $1.66 per share, ver- sus $181.1 million, or $1.19 per share, in the same quarter last year. Revenue grew 1.3 percent to $3.11 billion. Adjusted net income was $1.24 per share, which fell below analysts' expectations of $1.25 in earnings per share and $3.15 billion in revenue. PH ended at 117.85, and was the top dollar loser. Honeywell advanced 4.70 points, or 5.23 percent after beating analysts' esti- mates for fourth quarter earnings. HON said it earned net income of $947 mil- lion, or $1.19 per share, compared to net income of $251 million, or $0.32 per share, in last year's comparable quar- ter. Revenue was up 8 percent to $10.39 billion. Excluding one-time items, HON earned $1.24 per share, best- ing estimates of $1.21 per share from analysts surveyed by Thomson Reuters. Honeywell closed at 94.61, and was the top dollar gainer. Shares of Dover fell 10.30 points, or 10.69 percent this session, despite meet- ing analysts' expectations for the fourth quarter. DOV reported net income from continuing operations of $210.8 mil- lion, or $1.22 per share, compared to net income of $208.2 million, or $1.16 per share, last year. Revenue rose 10 percent to $2.2 billion. Dover said it plans to spin off its Knowles communi- cations technologies unit. Knowles will begin trading on March 3, 2014 under the ticker "KN" on the New York Stock Exchange. DOV ended at 86.06. n Margot Crabtree is President of Trade Trends Inc., a fnancial data services provider. She has been offering market analysis with customized stock indices and fnancial commentaries since 1999. E X P E RT A DV I C E BUILDING YOUR HVACR BUSINESS BY MARGOT CRABTREE PRESIDENT OF TRADE TRENDS, INC. Stocks Struggle as Markets Correct HVACR BUSINESS MARKET TRENDS HVACR BUSINESS STOCK INDEX Da ACR Business S&P 500 NASDAQ Source: Trade Trends, Inc. (303) 665-5881

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