Sales were up 9% in U.S. dollars and 7% in local currencies over the third quarter of 2010. From an organic standpoint, excluding both acquisitions and currency effects, sales in Q3 2011 were up 5% over last year. Sequentially, sales were up 1% in U.S. dollars and 2% organically from Q2. In comparing Q3 to the midpoint of the company's guidance of $1,008,000,000, sales exceeded guidance by approximately $25 million. Sales in the Mobile Devices market were particularly strong, growing over 20% sequentially as demand previously planned for the fourth quarter was pulled forward by certain customers.This was partially offset by softness in the industrial market, particularly in Europe, reflecting weaker economic conditions and by a reduction of about $11 million as a result of the previously announced flooding at the company's New York facility, which resulted in limited manufacturing and sales activity in the month of September. Breaking down sales into our 2 major components, our cable business, which comprise 7% of our sales in the quarter, was up 13% from last year and 2% from last quarter. The interconnect business, which comprised 93% of our sales, was up 9% from last year and 1% sequentially. Adam will comment further on trends by market in a few minutes. Operating income for the quarter, excluding the $12.8 million casualty loss relating to the flood, was $199 million compared to $189 million last year. Operating margin was 19.3% compared to 19.9% last year and 19.4% last quarter. Operating income is net of stock option expenses of approximately $7.6 million in the third quarter of 2011 and $7 million in the third quarter of 2010 or about 0.7% of sales in both periods. From a segment perspective, in the cable business, margins were 13.1%, down from 13.5% last year. The margin decline relates primarily to higher material costs. From a sequential standpoint however, Cable margins improved from 12.8%, primarily as a result of lower material costs. In the interconnect business, margins were 21.5% compared to 22.3% last year. The lower interconnect operating margins reflect the impacts of increases in material input costs and to a lesser extent, the costs associated with workforce reductions of approximately 5% or 2,000 people in the quarter.
It also was impacted by the impact of the loss of sales and margin due to the temporary flood-related shutdown of the company's New York facility in September. These impacts were partially offset by the positive impacts of higher volume, cost reduction actions and price increases. Overall, we're very pleased with the company's margin achievement. The company's overall profitability level continues to be very strong in the face of significant global pressures and a mixed demand environment.We continue to believe that the company's entrepreneurial operating structure and cultural cost control will allow us to react in a fast and flexible manner, and achieve strong profitability going forward. Interest expense for the quarter was $10.5 million compared to $10.6 million last year, reflecting lower average borrowing cost, partially offset by the higher average debt levels, resulting from the company's stock buyback program. Other income was $2.3 million in the quarter, up from $1.3 million last year, primarily as a result of higher interest income on higher levels of cash and short-term cash investments. The tax rate in the third quarter of 2011 was 23.5% compared to a rate of 22.8% in the third quarter of 2010. The prior year quarter included a net benefit relating to a reduction in international tax expense, primarily due to the favorable settlement of certain tax positions and the completion of prior year audits of about $8.4 million or $0.05 per share. The 2011 quarter includes a tax benefit of about $4.8 million or 37% of the $12.8 million casualty loss related to the flood described before, and a benefit of $4.5 million or $0.03, relating to the completion of certain prior year tax audits. Excluding these effects, the effective tax rate on Q3 2011 was about 26.8% and we currently expect the same rate in the fourth quarter of 2011. Net income, excluding one-time items, was approximately 13.4% of sales in Q3, a very strong performance. Diluted earnings per share on an as-reported basis was $0.79 in the third quarter of 2011 and $0.78 in the third quarter of 2010. After adjustment for one-time items, diluted earnings per share increased 11% to $0.81 in the quarter.
Orders for the quarter were a record 1,017,000,000, up 8% from last year, resulting in a book-to-bill ratio of approximately 0.98:1. As we announced last month, in early September, the company incurred flood damage at its Sidney, New York facility. In addition to the loss of sales and margin from the temporary shutdown of the facility in September and October, the company incurred a one-time charge relating to the write-off of damaged inventory and productive asset in addition to cleanup costs.Read the rest of this transcript for free on seekingalpha.com