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Injection molding: Milacron’s cost cuts boost earnings

Aggressive overhead cost reductions lifted operating earnings to $6.5 million in the third quarter for plastics machinery and component supplier Milacron (Cincinnati, OH) versus $3.0 million in the third quarter a year ago, but the company still reported a net loss of $2.6 million, down from $4.5 million in the year-ago quarter. The company says its aggressive cost cutting has been effective, lifting operating earnings through three quarters to $14.5 million compared to $3.6 million last year.

Sales of $195 million were down 4% from $204 million in the third quarter last year, and $191 million in new orders, down 6% from $203 million in the third quarter of 2007, reflect softness in the North American automotive and construction markets, according to Milacron.

For the North American unit, which includes results from the company’s operations in China and India, sales of $92 million were flat, although cost reductions and efficiency measures lifted earnings from $3.8 million to $8.4 million. In Europe, declining demand for injection molding machines in Western Europe pushed segment sales to $38 million from $46 million in 2007. Blowmolding machine shipments were flat, and lower sales volume led to a segment operating loss of $1.9 million compared to a small operating profit of $0.9 million in the year-ago quarter.

Driven by the automotive industry’s troubles, continued softness in mold technologies sales at Milacron business unit D-M-E, both North America and Western Europe, led to a sales drop from $37 million to $35 million. In spite of this, Milacron says restructuring and other efficiency improvements helped this segment post a modest $0.7 million profit compared to a loss of $0.4 million loss one year ago.


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