Kone Oyj, the Finnish company that supplies elevators to the London underground and the Grand Mosque in Mecca, said second-quarter profit rose 19 percent on sales of new equipment sales in Asia and Europe.
Net income increased to 98.7 million euros ($157 million), from 82.9 million euros a year earlier, Helsinki-based Kone said today in a statement. Sales advanced 14 percent to 1.14 billion euros.
Revenue gained 25 percent in Asia and 15 percent in Europe, Middle East and Africa, more than compensating for a falling dollar and a North American housing slowdown that has spread to other construction markets. Kone is building lifts for the Marina Bay Sands resort in Singapore, the Shanghai International Finance Center, and the Delhi Metro.
``The results, especially in Europe, Middle East and Africa are encouraging, given all the comments on weak construction markets,'' said Maria Ivek, a Zurich-based Credit Suisse analyst with an ``outperform'' rating on Kone.
Kone closed down 7.2 percent at 22.04 euros in the Finnish capital, mirroring declines at construction companies and building-material suppliers. The company has lost 8 percent this year, giving it a market value of 5.6 billion euros.
Analysts surveyed by Bloomberg predicted a profit of 101 million euros on sales of 1.09 billion euros. Earnings per share rose to 39 cents from 33 cents last year.
Modernization, Maintenance
Kone has approximately 12 percent of the world elevator and escalator market, competing with ThyssenKrupp AG, United Technologies' Otis Elevator Co. unit, Switzerland's Schindler AG and Mitsubishi Elevator Europe BV.
Chief Executive Officer Matti Alahuhta has purchased small maintenance companies, most recently in France and Spain, to expand in maintenance and modernization, which are less cyclical than new equipment sales. Service and revamps accounted for 52 percent of sales in the quarter.
``In the U.S., the commercial segment no longer compensated for the slowdown in the residential segment,'' the company said in the statement. ``In the United Kingdom, the residential market continued to weaken, while the major project market was active.''
New contracts increased 16 percent, boosting the order book to 3.8 billion euros, as the North American real estate slowdown spread from housing to other building. Alahuhta said the company will grow more than 10 percent this year, compared with previous guidance of ``about'' 10 percent.
``It's quite exceptional that they were able to increase new equipment so much, and yet their operating profit is also increasing, said Credit Suisse's Ivek. ``Given that it's generally assumed new equipment has lower margins than service.''
Kone is controlled by Chairman Antti Herlin, who has more than 60 percent of votes according to the company's Web site. Herlin is the fourth generation of owners of Kone.
Tuesday, July 22, 2008
Monday, July 21, 2008
UTC Has Strong Quarter, Sees Challenges For Pratt
The second-quarter financial results of United Technologies Corp., Connecticut's largest employer, beat Wall Street expectations, and the company said Thursday it now expects higher full-year earnings than previously projected.
But UTC also said high oil prices and the fragile state of the airline industry pose challenges for its aerospace businesses, especially East Hartford-based Pratt & Whitney.
UTC reported net income of $1.3 billion for the quarter, up 11 percent over the same quarter last year on sales of $15.7 billion, up 13 percent.
Earnings per share were up 14 percent to $1.32, which was 2 cents above the consensus estimate of 16 analysts polled by Thomson Reuters.
Profits after restructuring and other charges were up at five of UTC's six operating units, which make jet engines, helicopters, aircraft parts, elevators, air-conditioning and heating systems and security systems.
"United Technologies put in a strong performance in a tough environment," said Richard Tortoriello, an equity analyst with Standard & Poor's in New York who maintains a "buy" rating on the company's stock.
Otis Elevator Co. and UTC Fire & Security, the relatively new but fast-growing security business, performed especially well in the quarter, with profits at both growing more than 24 percent. Otis sales in Asia, especially China, remain strong.
Only Carrier Corp., which recorded $46 million in restructuring and other charges, failed to increase profits in the quarter. The weak housing market continues to be a problem for the company, the world's largest air-conditioner maker. Commercial refrigerator sales were also weak in some markets, company officials said.
While sales and profits rose for all three of UTC's aerospace units, most dramatically at Stratford-based Sikorsky Aircraft, Pratt's gains were modest due to slackening demand for spare parts and service. Profits at the East Hartford-based jet engine maker grew less than 5 percent on sales growth of 6 percent.
Pratt's main nonmilitary customers — commercial airlines — are taking desperate measures to remain in business in the face of unprecedented fuel prices. Some major airlines have grounded older, fuel-guzzling aircraft, or said they plan to, which means they need fewer spare parts for the engines.
Pratt makes a significant amount of its money on selling spare parts and maintenance and repair services.
"There's no doubt that the aerospace aftermarket is cooling down, and it's going to go down further," Tortoriello said.
Sikorsky delivered 53 large helicopters in the last three months, and UTC executives said the unit would meet its full-year goal of delivering more than 200. Sikorsky's profits were up 28 percent on sales growth of 9 percent.
Hamilton Sundstrand, based in Windsor Locks, had profit growth of 14 percent on sales that were up nearly 18 percent.
Despite "moderation in our commercial aerospace aftermarkets," UTC said it now expects full-year sales of $60 billion and earnings in a range of $4.80 to $4.95 a share, up from $4.65 to $4.85.
"While the challenges in the world's economies we saw at the outset of the year are materializing, especially with higher oil prices impacting the airlines and the U.S. economy generally, we remain confident in our ability to deliver on this increased guidance given the balance across UTC's businesses and the strength in our backlogs," CEO Louis Chenevert said in a statement.
Restructuring costs clipped 6 cents from UTC's per-share earnings, the company said, but the weak dollar offered a foreign currency exchange benefit of 4 cents a share. Rising costs of some metals will force the company to spend more than anticipated on commodities this year.
UTC said it plans to double restructuring spending in 2008 and probably spend more than $2 billion on buying back its own shares, a common tactic for supporting the stock price. The company spent $719 million on share repurchases in the second quarter and more than $1.5 billion in the first half of the year.
Like that of many major aerospace and defense companies, UTC's stock has been trading at or near its low for the year. UTC shares closed at $64.70 Thursday, up almost 6 percent.
Pratt will be a focus of restructuring efforts going forward, UTC executives said in a conference call with Wall Street analysts on Thursday. Executives did not say what they would do, but they said recent restructuring actions elsewhere within UTC had been "primarily people-related."
Pratt officials would not comment Thursday on their restructuring plans.
UTC has eliminated about 2,500 workers in 2008, about 1 percent of its worldwide workforce, executives said. There have been no layoffs in Connecticut.
A representative of Pratt's main union, the International Association of Machinists and Aerospace Workers, said the company had not told him of any plans to cut jobs at Pratt's Connecticut plants.
"If they had any kind of restructuring in mind that would affect our membership, they would normally let us know ahead of time," said James Parent of IAM's District 26.
In 2008 so far, Pratt employment has remained level. A few dozen workers have accepted voluntary buyouts, Parent said, but the company has added people elsewhere. Statewide, Pratt's hourly workforce is just shy of 4,100, Parent said.
However, he added, "every day you read something else about the airline industry. That without a doubt impacts us."
But UTC also said high oil prices and the fragile state of the airline industry pose challenges for its aerospace businesses, especially East Hartford-based Pratt & Whitney.
UTC reported net income of $1.3 billion for the quarter, up 11 percent over the same quarter last year on sales of $15.7 billion, up 13 percent.
Earnings per share were up 14 percent to $1.32, which was 2 cents above the consensus estimate of 16 analysts polled by Thomson Reuters.
Profits after restructuring and other charges were up at five of UTC's six operating units, which make jet engines, helicopters, aircraft parts, elevators, air-conditioning and heating systems and security systems.
"United Technologies put in a strong performance in a tough environment," said Richard Tortoriello, an equity analyst with Standard & Poor's in New York who maintains a "buy" rating on the company's stock.
Otis Elevator Co. and UTC Fire & Security, the relatively new but fast-growing security business, performed especially well in the quarter, with profits at both growing more than 24 percent. Otis sales in Asia, especially China, remain strong.
Only Carrier Corp., which recorded $46 million in restructuring and other charges, failed to increase profits in the quarter. The weak housing market continues to be a problem for the company, the world's largest air-conditioner maker. Commercial refrigerator sales were also weak in some markets, company officials said.
While sales and profits rose for all three of UTC's aerospace units, most dramatically at Stratford-based Sikorsky Aircraft, Pratt's gains were modest due to slackening demand for spare parts and service. Profits at the East Hartford-based jet engine maker grew less than 5 percent on sales growth of 6 percent.
Pratt's main nonmilitary customers — commercial airlines — are taking desperate measures to remain in business in the face of unprecedented fuel prices. Some major airlines have grounded older, fuel-guzzling aircraft, or said they plan to, which means they need fewer spare parts for the engines.
Pratt makes a significant amount of its money on selling spare parts and maintenance and repair services.
"There's no doubt that the aerospace aftermarket is cooling down, and it's going to go down further," Tortoriello said.
Sikorsky delivered 53 large helicopters in the last three months, and UTC executives said the unit would meet its full-year goal of delivering more than 200. Sikorsky's profits were up 28 percent on sales growth of 9 percent.
Hamilton Sundstrand, based in Windsor Locks, had profit growth of 14 percent on sales that were up nearly 18 percent.
Despite "moderation in our commercial aerospace aftermarkets," UTC said it now expects full-year sales of $60 billion and earnings in a range of $4.80 to $4.95 a share, up from $4.65 to $4.85.
"While the challenges in the world's economies we saw at the outset of the year are materializing, especially with higher oil prices impacting the airlines and the U.S. economy generally, we remain confident in our ability to deliver on this increased guidance given the balance across UTC's businesses and the strength in our backlogs," CEO Louis Chenevert said in a statement.
Restructuring costs clipped 6 cents from UTC's per-share earnings, the company said, but the weak dollar offered a foreign currency exchange benefit of 4 cents a share. Rising costs of some metals will force the company to spend more than anticipated on commodities this year.
UTC said it plans to double restructuring spending in 2008 and probably spend more than $2 billion on buying back its own shares, a common tactic for supporting the stock price. The company spent $719 million on share repurchases in the second quarter and more than $1.5 billion in the first half of the year.
Like that of many major aerospace and defense companies, UTC's stock has been trading at or near its low for the year. UTC shares closed at $64.70 Thursday, up almost 6 percent.
Pratt will be a focus of restructuring efforts going forward, UTC executives said in a conference call with Wall Street analysts on Thursday. Executives did not say what they would do, but they said recent restructuring actions elsewhere within UTC had been "primarily people-related."
Pratt officials would not comment Thursday on their restructuring plans.
UTC has eliminated about 2,500 workers in 2008, about 1 percent of its worldwide workforce, executives said. There have been no layoffs in Connecticut.
A representative of Pratt's main union, the International Association of Machinists and Aerospace Workers, said the company had not told him of any plans to cut jobs at Pratt's Connecticut plants.
"If they had any kind of restructuring in mind that would affect our membership, they would normally let us know ahead of time," said James Parent of IAM's District 26.
In 2008 so far, Pratt employment has remained level. A few dozen workers have accepted voluntary buyouts, Parent said, but the company has added people elsewhere. Statewide, Pratt's hourly workforce is just shy of 4,100, Parent said.
However, he added, "every day you read something else about the airline industry. That without a doubt impacts us."
Tuesday, July 15, 2008
Fujitec America will relocate headquarters
Fujitec America's new U.S. headquarters will be moved from Lebanon to Mason, President Kenny Yamashiro told Mason City Council on Monday, July 14.
The contract is still under negotiation and is expected to be announced next week, said Michele Phelps, marketing director.
Phelps said all 130 employees will move with the company, which manufactures elevators and escalators.
In March, Fujitec sold the 124 acre property where it is headquartered to Cincinnati Bell Technology Solutions for $16 million because the space was too large, Phelps said.
The company will first invest $4 million in renovating the old Borden building on Innovation Way in Mason for its new headquarters. Payroll for these employees, who make an average of $65,000 a year, will amount to $7.1 million. Mason estimated the company will bring $1.2 million worth of new revenue to the local economy.
Moving gives Fujitec the opportunity to modernize its surroundings and have more efficient systems, Phelps said. Fujitec America will continue manufacturing elevator and escalator equipment in New York and larger components overseas.
Fujitec will remain in Lebanon until the end of 2008, she said.
In 2006, in order to meet long term growth opportunities in the industry, Fujitec refocused the Lebanon headquarters on research, development and manufacturing of controllers for elevators and escalators.
In 1983, the facility was originally used to manufacture large scale escalator transit systems, which needed more space and employees. Plans to develop the property never happened, Phelps added.
"Right now Fujitec is the most profitable and stable its been in 30 years. From a financial perspective, there's a lot of overhead at this facility that we've been able to get rid of," Phelps said.
Recently Fujitec announced a regional restructure that allows the company to expand by regionalizing business plans through vice presidents in Eastern, Central and Western regions.
Fujitec America is a division of Fujitec Co., Ltd., founded in Osaka, Japan. Current Dayton maintenance customers include Dayton Board of Education, Maria Joseph Living Care Center, Schuster Towers and Dayton YWCA.
The contract is still under negotiation and is expected to be announced next week, said Michele Phelps, marketing director.
Phelps said all 130 employees will move with the company, which manufactures elevators and escalators.
In March, Fujitec sold the 124 acre property where it is headquartered to Cincinnati Bell Technology Solutions for $16 million because the space was too large, Phelps said.
The company will first invest $4 million in renovating the old Borden building on Innovation Way in Mason for its new headquarters. Payroll for these employees, who make an average of $65,000 a year, will amount to $7.1 million. Mason estimated the company will bring $1.2 million worth of new revenue to the local economy.
Moving gives Fujitec the opportunity to modernize its surroundings and have more efficient systems, Phelps said. Fujitec America will continue manufacturing elevator and escalator equipment in New York and larger components overseas.
Fujitec will remain in Lebanon until the end of 2008, she said.
In 2006, in order to meet long term growth opportunities in the industry, Fujitec refocused the Lebanon headquarters on research, development and manufacturing of controllers for elevators and escalators.
In 1983, the facility was originally used to manufacture large scale escalator transit systems, which needed more space and employees. Plans to develop the property never happened, Phelps added.
"Right now Fujitec is the most profitable and stable its been in 30 years. From a financial perspective, there's a lot of overhead at this facility that we've been able to get rid of," Phelps said.
Recently Fujitec announced a regional restructure that allows the company to expand by regionalizing business plans through vice presidents in Eastern, Central and Western regions.
Fujitec America is a division of Fujitec Co., Ltd., founded in Osaka, Japan. Current Dayton maintenance customers include Dayton Board of Education, Maria Joseph Living Care Center, Schuster Towers and Dayton YWCA.
Thursday, July 10, 2008
Kone chosen to supply escalators for new M&S Store in Malvern
Kone has been chosen to supply escalators to Marks & Spencer's new store in Malvern - which reportedly features a number of initiatives in line with M&S's 100-point, five-year 'eco' plan.
In accordance with M&S's plans to make all UK operations carbon neutral by 2012, Kone said that it has equipped the new store with energy-efficient escalators.
According to Kone, the energy-efficient escalators adjust its speed based on usage, increase equipment lifetime and can reduce energy consumption by up to 30%.
In addition to the energy-efficient escalators, the store will have lights with motion sensors, self-closing water taps and other features to save energy and water, Kone said.
Andy Jones, national sales manager of escalators at Kone, said: "Kone has a long and successful relationship with M&S in the UK. We are delighted to be their partner in this new ecological initiative, and with our environmentally friendly technology, we have a great chance to contribute to the new store's carbon-neutral targets."
In accordance with M&S's plans to make all UK operations carbon neutral by 2012, Kone said that it has equipped the new store with energy-efficient escalators.
According to Kone, the energy-efficient escalators adjust its speed based on usage, increase equipment lifetime and can reduce energy consumption by up to 30%.
In addition to the energy-efficient escalators, the store will have lights with motion sensors, self-closing water taps and other features to save energy and water, Kone said.
Andy Jones, national sales manager of escalators at Kone, said: "Kone has a long and successful relationship with M&S in the UK. We are delighted to be their partner in this new ecological initiative, and with our environmentally friendly technology, we have a great chance to contribute to the new store's carbon-neutral targets."
Tuesday, July 8, 2008
ThyssenKrupp Mobile Escalators to Move Guests of State at Beijing International Airport During and After Olympics
The Hamburg-based company ThyssenKrupp Fahrtreppen, a subsidiary of ThyssenKrupp Elevator, is supplying two exclusive mobile escalators for the Chinese airline Air China. The custom units will be used at Beijing International Airport for receiving important guests of state during and after the Olympic Games.
Custom-built in Hamburg, the two escalators have a connecting height of up to 4.90 meters. They are each mounted on a truck which drives them right up to the aircraft. Two different docking heights allow docking with Boeing 747/Airbus A380 as well as Airbus A330/A340 planes. Height differences due to different loading and fuel levels can be offset hydraulically. Gold-colored steps and tinted glass balustrades ensure a fitting reception for special guests. Shipping by barge and container ship from Hamburg to Asia has already begun – the special cargo is expected to arrive in China at the beginning of August.
“The Air China contract was a tricky challenge for our company,” says Wolfgang Stein, managing director of ThyssenKrupp Fahrtreppen. “Normally it’s escalators that move people, but in this case the escalators themselves also have to be mobile – which made things particularly interesting for our engineers. The order gives us the unique opportunity to take part in the Olympic Games with particularly innovative products,” said Stein.
ThyssenKrupp Fahrtreppen is the only company in the world capable of supplying mobile escalators of the required specification: The vehicles are fitted with their own hydraulic units and generators to operate the lift cylinders and escalator drives. Air China can also rely on the experience of the Hamburg-based escalator manufacturers, who have already built 16 such installations for the Middle East and Eastern Europe. This is the first contract for the Asian region.
Besides the mobile escalators ThyssenKrupp Elevator is supplying a further 318 products for the Olympic Games in China: For example, 16 elevators, ten escalators and 90 moving walks have been installed in the new Terminal 3 of Beijing International Airport. Products from ThyssenKrupp Elevator are also in use in the National Conference Centre in Beijing Olympic Park and at further Olympic venues in Beijing and Qingdao.
Custom-built in Hamburg, the two escalators have a connecting height of up to 4.90 meters. They are each mounted on a truck which drives them right up to the aircraft. Two different docking heights allow docking with Boeing 747/Airbus A380 as well as Airbus A330/A340 planes. Height differences due to different loading and fuel levels can be offset hydraulically. Gold-colored steps and tinted glass balustrades ensure a fitting reception for special guests. Shipping by barge and container ship from Hamburg to Asia has already begun – the special cargo is expected to arrive in China at the beginning of August.
“The Air China contract was a tricky challenge for our company,” says Wolfgang Stein, managing director of ThyssenKrupp Fahrtreppen. “Normally it’s escalators that move people, but in this case the escalators themselves also have to be mobile – which made things particularly interesting for our engineers. The order gives us the unique opportunity to take part in the Olympic Games with particularly innovative products,” said Stein.
ThyssenKrupp Fahrtreppen is the only company in the world capable of supplying mobile escalators of the required specification: The vehicles are fitted with their own hydraulic units and generators to operate the lift cylinders and escalator drives. Air China can also rely on the experience of the Hamburg-based escalator manufacturers, who have already built 16 such installations for the Middle East and Eastern Europe. This is the first contract for the Asian region.
Besides the mobile escalators ThyssenKrupp Elevator is supplying a further 318 products for the Olympic Games in China: For example, 16 elevators, ten escalators and 90 moving walks have been installed in the new Terminal 3 of Beijing International Airport. Products from ThyssenKrupp Elevator are also in use in the National Conference Centre in Beijing Olympic Park and at further Olympic venues in Beijing and Qingdao.
Monday, July 7, 2008
Schindler announces price increase in Europe
Following the announcement of price increases in North America and Asia-Pacific,
Schindler is to increase Europe-wide the price of all its elevators, escalators, moving
walks and modernisations by approximately six percent (6.0%). The increase, which is
effective immediately, is due to the continuing escalation of fuel prices, and soaring
price increases for commodities and specialty metals, which impact Schindler�s costs for
manufacturing and transportation.
Schindler is to increase Europe-wide the price of all its elevators, escalators, moving
walks and modernisations by approximately six percent (6.0%). The increase, which is
effective immediately, is due to the continuing escalation of fuel prices, and soaring
price increases for commodities and specialty metals, which impact Schindler�s costs for
manufacturing and transportation.
Thursday, July 3, 2008
Sustainability Leader KONE Announces Price Increase
KONE Inc., an industry leading
provider of People Flow(TM) Solutions, announced today that they are
increasing pricing in Canada and the United States by approximately five
percent (5%) on select Elevator and Escalator solutions for new construction
and modernization. As with many of our customers, KONE is facing higher
commodity and energy prices.
While KONE understands the concerns for rising cost in building
construction and refurbishment, they continue to focus on delivering solutions
that provide overall life-cycle cost savings for the customer. With KONE's
industry leading Eco-efficient(TM) products and services, customers will see
the benefit from lower energy use, reduced construction material needs and the
elimination of hydraulic oil.
Additionally, KONE takes sustainability within their operations very
seriously. For example, maximizing eco-efficiency through route planning for
the maintenance vehicle fleet drastically reduces fuel consumption. "We're
committed to being a sustainable, green company, and will continue our efforts
to raise productivity and maximize eco-efficiency," says Vance Tang, EVP and
Area Director for KONE Americas. "Our goal is to minimize increased costs for
various commodities and energy and continue to deliver best in class products
and services."
KONE was the first company in the vertical transportation industry to
invent and introduce the innovative Machine Room-Less (MRL) elevator solution.
Since its introduction in 1996, the efficient operation of over 200,000
EcoSpace(TM) and MonoSpace(R) solutions has saved as much energy as produced
by a typical 250 megawatt power plant. The measure of sustainability of the
MRL solution since 1996 is also comparable to saving 2,000,000 barrels of oil
and reducing the CO2 emissions of 100,000 cars.
The price increase will take effect on July 15, 2008.
provider of People Flow(TM) Solutions, announced today that they are
increasing pricing in Canada and the United States by approximately five
percent (5%) on select Elevator and Escalator solutions for new construction
and modernization. As with many of our customers, KONE is facing higher
commodity and energy prices.
While KONE understands the concerns for rising cost in building
construction and refurbishment, they continue to focus on delivering solutions
that provide overall life-cycle cost savings for the customer. With KONE's
industry leading Eco-efficient(TM) products and services, customers will see
the benefit from lower energy use, reduced construction material needs and the
elimination of hydraulic oil.
Additionally, KONE takes sustainability within their operations very
seriously. For example, maximizing eco-efficiency through route planning for
the maintenance vehicle fleet drastically reduces fuel consumption. "We're
committed to being a sustainable, green company, and will continue our efforts
to raise productivity and maximize eco-efficiency," says Vance Tang, EVP and
Area Director for KONE Americas. "Our goal is to minimize increased costs for
various commodities and energy and continue to deliver best in class products
and services."
KONE was the first company in the vertical transportation industry to
invent and introduce the innovative Machine Room-Less (MRL) elevator solution.
Since its introduction in 1996, the efficient operation of over 200,000
EcoSpace(TM) and MonoSpace(R) solutions has saved as much energy as produced
by a typical 250 megawatt power plant. The measure of sustainability of the
MRL solution since 1996 is also comparable to saving 2,000,000 barrels of oil
and reducing the CO2 emissions of 100,000 cars.
The price increase will take effect on July 15, 2008.
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