York International Comments on 2004 Company Outlook
Dec 17, 2003
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York International Corporation commented on its 2004 outlook. Earnings for the full year of 2004 are estimated to be U.S. $2.70 to $3.00 per share.
"I am pleased with the improvements we are achieving in 2003 and will deliver in 2004. Each operating unit generated year-over-year earnings improvement in 2003 and, with the exception of Bristol, each business will deliver substantial earnings improvement in 2004," said C. David Myers, York President. "The results reflect the successful execution of our cost reduction actions, growth in service, parts, UPG and China, and improved operations in almost all areas. While we are disappointed in the short-term impact of Bristol losing a major customer, Bristol will continue to focus on delivering new products and regaining applications in the longer term."
He continued, "It is also critical that we continue to invest in opportunities for growth such as service, China and product development. Our investments in business systems will enable this growth and allow us to standardize our global processes. This initiative, named VISTA, is necessary to better leverage Yorks's cost structure, achieve operational efficiencies, and enhance our supply chain capabilities and financial measurement. The improvement in our global infrastructure results from our IT outsourcing arrangement and is a key enabler for VISTA."
The company's key operating expectations include: expanding and investment of its national and global service business to improve productivity and expand the multi-site commercial service business, increasing revenue growth in China of at least double the GPD growth rate of the overall Chinese economy, and earning $25 million of incremental savings from the cost reduction actions initiated in 2003.
In addition, York also expects an increase of $10 million of additional expense for further investments in VISTA, continued volume and pricing pressures for large commercial markets, particularly in U.S. and Europe, and a significant reduction in sales at Bristol Compressors due to competitive pressures and the loss of a major customer. The impact of the sales reduction will be up to $13 million in earnings, primarily in the first half of the year.
"The operating trends are positive and we remain optimistic about York's future performance and the achievements we expect. Our operations are more efficient, we are investing and growing in key areas, and we have executed well during challenging times," said Mr. Myers
For the full year of 2003, York expects income before the cumulative effect of a change in accounting principle to be approximately $0.15 per share including all charges related to the cost reduction actions and the pension changes. Excluding the special items, York reiterated its full-year outlook of $2.56 per share.
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