Clarcor revenues in 3Q16
Clarcor revenues (CLC) fell 7.3% year-over-year (or YoY) to $331.4 million in 3Q16, which was below Wall Street estimates of $339 million. Foreign currency translation resulted in a negative impact of 2%. A major part of the rest of the reduction was driven by lower natural gas filtration sales. Most of the company’s end markets such as agriculture (MOO) and construction (ITB) machinery, and natural gas and oil are currently in a down cycle. The company has consequently experienced five consecutive quarters of sales declines. Cummins (CMI), Pall, and Donaldson (DCI) compete against the company in both segments.
Clarcor engine filtration sales and margins
Clarcor’s third quarter sales in engine filtration fell 9.3% or by $13.8 million to $186.7 million. Currency translation had a 2% impact on the results in this segment. Sales figures were also affected by the one-time impact resulting from strategic reorganization at a key retail customer. Sales in the US independent aftermarket were affected by ongoing weak conditions in the oil and gas industry. The automotive (FSAVX) filtration end markets were also weak. However, margins improved in the segment by 200 basis points to 20.3% on account of lean manufacturing operational improvements introduced earlier this year.
Clarcor industrial filtration sales
Sales in the industrial filtration segment fell 4.6% YoY to $144.7 on account of headwinds in the gas turbine filtration sales. Lower revenues in the shale extraction infrastructure projects resulted in a $16 million, or 26%, decline in the gas turbine filtration unit. These were partially offset by heating, ventilation, and air condition filtration sales, which increased 14% this quarter. Segment margins were flat YoY at 11.4%.