Anixter International, Inc., of Glenview, Ill (NYSE: AXE) reported sales of $1.52 billion for the quarter ended April 4, 2014, a 2.2 percent increase compared to the year-ago quarter. Despite the negative weather impact in the months of January and February and excluding the impact of unfavorable copper pricing and foreign exchange, organic sales increased by 3.8 percent year-over-year.
Anixter’s operating income in the current quarter of $85.7 million compares to $81.0 million in the year-ago quarter. The 5.7 percent increase would have been 9.0 percent excluding the $2.7 million negative operating income impact of the drop in copper prices year-over-year. Operating margin of 5.6 percent increased by 20 basis points versus the prior year and decreased 40 basis points sequentially.
According to a company press release, Anixter’s net income of $47.4 million compares to $42.5 million in the year-ago quarter. The current quarter results included foreign exchange losses due to currency devaluations in Venezuela and Argentina of $8.0 million (after-tax $5.3 million) partially offset by the reversal of deferred tax valuation allowances of $4.9 million in Europe. Excluding the impact of these two items, adjusted net income for the current quarter was $47.8 million, an increase of 12.5 percent from the prior year quarter.
“Steadily improving market trends in all of our segments fueled strong performance, particularly in our OEM Supply (“fasteners”) segment and across all segments in Europe and emerging markets,” said Bob Eck, president and CEO, in the press release. “For the fifth consecutive quarter we achieved significant performance improvements in our fasteners segment, reflecting increases in our customers’ production levels coupled with the results of actions we took to reposition the business for profitable growth.”
Eck said Anixter also experienced a solid recovery in its core enterprise communications business, with double-digit growth in both its emerging markets and European geographies. “Overall,” he added, “we are encouraged by the solid performance within each of our segments across our global markets, reflecting the value of our global capabilities to an increasing number of global customers.”
Anixter’s operating expenses of $267.9 million for the first quarter of 2014 increased by 4.2 percent versus the prior year quarter, with the increase primarily caused by higher employee incentives, increased medical benefit costs and investments in new positions to support the firm’s strategic initiatives.
“With solid momentum in the first quarter in all of our segments and across all geographies, we believe we are well-positioned for global growth as the year progresses,” said Eck. “In addition to a steadily improving economy, we have strategic initiatives which we believe will enable us to gain market share and exceed market growth across our business.”
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