In the Hydraulics segment, fourth quarter sales were $693 million, 2 percent lower than the fourth quarter of 2011. The 2 percent sales decline was made up of 10 percent growth from acquisitions offset by an 11 percent decline in core growth and a 1 percent decline from foreign exchange. Hydraulics markets in the fourth quarter declined 11 percent compared to the same period in 2011, with U.S. markets down 9 percent and non-U.S. markets down 12 percent.
Operating profits in the fourth quarter were $44 million. Excluding acquisition integration charges of $7 million in the fourth quarter of 2012, operating profits were $51 million, down 52 percent from the fourth quarter of 2011.
“The global hydraulics market had another weak quarter, as mobile OEMs in particular maintained a cautious stance regarding future volumes. Our bookings in the quarter declined 24 percent from the fourth quarter of 2011,” said Cutler. “To address continued weakness in our Hydraulics markets, particularly in Europe, we took restructuring actions in the fourth quarter that reduced our Hydraulics margins by 2.5 percent. For 2013, we anticipate global hydraulics markets will decline by 4 percent, with U.S. markets down a bit more than non-U.S. markets.”
The Aerospace segment posted fourth quarter sales of $434 million, an increase of 1 percent over the fourth quarter of 2011. Aerospace markets in the fourth quarter grew by 1 percent. Aerospace orders declined by 4 percent during the quarter. Operating profits in the fourth quarter were $45 million, down 42 percent from the fourth quarter of 2011.“Aerospace markets in the fourth quarter posted just 1 percent growth, as good growth in commercial deliveries and modest growth in the commercial aftermarket was largely offset by a decline in the defense aerospace markets,” said Cutler. “The mix shift we have experienced has been the primary driver of our lower margins in 2012. We also took restructuring actions in the quarter to improve the efficiency of the business, reducing our operating margin by 0.9 percent. For 2013, we anticipate our aerospace markets will grow 2 percent.”
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