York International Corporation reported an increase in net income to U.S. $45.9 million, or $1.08 per diluted share, for the second quarter of 2005 as compared to $38.7 million, or $0.92 per diluted share, for the second quarter of 2004.
C. David Myers, president and CEO, said, "We delivered solid results and exceeded our guidance. Our results reflect improvement in execution and strong performance in key markets."
Net sales increased 6.4 percent from the second quarter of 2004 to $1.3 billion. Americas and Asia delivered double-digit increases; EMEA and UPG delivered better-than-market increases and Bristol sales declined substantially from the second quarter of 2004. Income from operations improved 47.8 percent to $72.0 million as compared to $48.7 million in 2004. Included in the 2004 results was a charge of $20.0 million to cost of goods sold related to the UPG furnace remediation program. Americas, EMEA, and UPG benefited from price increases and strength in service and parts, which offset increases in material costs, weakness in European markets and pricing pressure in Asia. Included in the second quarter results is $0.7 million of restructuring costs primarily associated with changes in the EMEA organization.
Net interest expense in the second quarter of 2005 increased to $12.1 million as compared to $10.1 million in the second quarter of 2004 as a result of higher average borrowing rates and higher debt levels. The income tax rate was 27.4 percent in the second quarter of 2005 and the projected operating tax rate for the full year is 28 percent.
Sales for the Global Applied business grew 11 percent from the second quarter of 2004 to $979.7 million. Sales in the Americas were up 19.4 percent due to strong service growth, equipment volume growth and price increases across the region. Sales increased 6.8 percent in EMEA driven by strong growth in the Middle East, partially offset by lower equipment sales in Europe. Asia sales increased 13.9 percent primarily driven by service and parts growth throughout the region and equipment volume outside of China.
Income from operations in the second quarter was $65.4 million compared to $60 million in the prior year. Volume leverage, productivity gains, and pricing realization in certain markets offset higher material costs globally and pricing pressure in Asia.
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