Sunny hopes for earnings report

Sarasota-based global valve manufacturer Sun Hydraulics could be in for a big boost when it releases its first quarter earnings report May 10.

One senior executive tells Coffee Talk that for Sun at least, the worst part of the recession is over, while another executive says the company has seen a big boost in orders from its Asian-Pacific clients. “The Asian-Pacific countries were first to go into the recession,” says Richard Arter, an investor relations spokesman at Sun. “So they are the first to get out.”

Arter declined to comment on any details in the company's forthcoming earnings report. But he did say that no matter what the figures are, anything positive would look glorious when held up against the downturn. “It was such a brutal recession,” says Arter.

Indeed, Sun dropped 45% in revenues last year, from $178 million in 2008 to $97 million. Its annual gross profit plummeted too, going from $59.12 million in 2008 to $21.96 million last year.

But in its fourth quarter earnings report released March 9, the company teased investors about some potential good news. Back then, the company projected $30 million in first quarter sales, which would be up 19% from the first quarter of 2009 and a 10% increase from the fourth quarter.

The company's shares have traded near 52-week highs. The price was down to $20.86 a share in February but has since climbed back up to nearly $30 a share. It closed May 3 at $28.88, 76 cents off its 52-week high of $29.64 a share.

The pending orders boost has one more additional benefit. It could signal the beginning of the end of the company's furlough program it instituted last year to help cut back on expenses without any layoffs.

Arter says at least 45% of the company's furloughed employees in the U.S. have already come back to work full time. The company, with 600 employees in Florida, could call back the rest of its workers to full time status by the end of May.