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Anixter International Inc. (NYSE: AXE) today reported sales of $1.58 billion for the quarter ended June 28, 2013, a 0.2 percent increase compared to the year ago quarter. Organic sales growth, which excludes the impact of the following items, declined by 0.6 percent year-over-year:
$26.6 million from the second quarter 2012 acquisition of Jorvex
$8.8 million from the unfavorable effect of copper pricing
$5 million from the unfavorable effect of foreign exchange
Year-over-year reported sales growth would have been approximately 1 percent excluding the negative impact of the previously reported conclusion of a large security solutions contract in the fourth quarter of 2012.
Operating income of $85.8 million decreased by 4.6 percent from $89.9 million in the prior year period. The year-over-year decrease in operating income was caused by weaker copper pricing and fewer large industrial projects in the Electrical and Electronic Wire and Cable segment along with weaker manufacturing levels affecting OEM Supply volume offsetting the improvement in the Enterprise Cabling and Security Solutions segment. Sequentially, operating income improved in both the Enterprise Cabling and Security Solutions and the OEM Supply segments.
Operating margin of 5.4 percent was flat with the previous quarter and compares to 5.7 percent in the prior year period. Net income from continuing operations of $45.9 million improved by 4.2 percent compared to $44 million in the prior year quarter. Earnings from continuing operations of $1.39 per diluted share increased by 8.6 percent, from $1.28 in the year ago quarter.
“As we expected, growth in the first half of the year was muted by the global macroeconomic climate. Our people delivered very sound performance despite these challenging conditions,” commented Bob Eck, President and CEO. “We were encouraged by improving market conditions in our core ECS business, which led to strong sales and margin performance in that segment’s North America region. We also experienced improving trends in Europe in all three of our segments. Our continued focus on margin and working capital efficiency while aligning our expense structure with the current environment positions us to deliver solid financial results in a business environment that we expect will be characterized by slow growth.”