Business | Markets
Credit crunch leaves diversity in its wake
The slowing global economy and turmoil in the credit markets has clouded the outlook for top diversified US manufacturers, executives warned on Thursday.
- Agencies
- Published: 23:47 October 16, 2008
Boston: The slowing global economy and turmoil in the credit markets has clouded the outlook for top diversified US manufacturers, executives warned on Thursday.
Companies including United Technologies Corp, Textron Inc and Danaher Corp told investors they were taking aggressive steps to cut costs as they brace for slowing demand, even as sale of their big-ticket elevators, jets and water treatment systems remained strong.
Some executives said the long lead times for their products - some of which are ordered years in advance - would help them navigate a slowing economy.
"While we did see order rates slow in some businesses in the quarter given the current turmoil, our backlogs across UTC remain strong," said Louis Chenevert, United Tech's President and Chief Executive. "In the face of ongoing economic challenges, we continue to aggressively cut costs and restructure our business."
The world's largest maker of elevators and air conditioners reported third-quarter profit that topped Wall Street's expectations and raised the low end of its forecast for the rest of the year - but offered little inkling of 2009.
Several executives said the credit crunch was taking a toll on their business.
Danaher, an industrial conglomerate that makes the Craftsman brand of tools, reported higher profit from continuing operations, beating Wall Street's forecast. It set a target for fourth-quarter profit that was below consensus. Danaher is cutting more than 1,000 jobs and closing facilities to cut costs.
Textron, the world's largest maker of corporate jets, reported a 19 per cent profit drop that was worse than analysts had expected, as the credit crunch hammered its finance arm, offsetting strong manufacturing results.
It unveiled a plan to substantially scale back its financial arm, including liquidating about $2 billion (Dh7.34 billion) in assets.
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