Sauer-Danfoss Reports Third Quarter Results

Sauer-Danfoss Inc. has announced its financial results for the third quarter ended September 30, 2011.

Third Quarter Review

Net sales for the third quarter increased 23% to $483.3 million, compared to net sales of $392.6 million for the third quarter of 2010. Excluding the impact of changes in currency translation rates, sales in the third quarter increased 17% over the same quarter last year. Sales for the third quarter increased 23% in the Americas, 22% in Europe, but declined 7% in the Asia-Pacific region, excluding the impact of changes in currency translation rates. Sales increased 28% in the Controls segment, 22% in the Propel segment, 9% in the Stand-Alone Businesses segment, and 2% in the Work Function segment, excluding the impact of changes in currency translation rates.

The company reported net income of $57.0 million, or $1.18 per share, for the third quarter of 2011, compared to net income of $32.1 million, or $0.66 per share, for the third quarter of 2010. Third quarter 2011 results were favorably impacted by $2.6 million, or $0.05 per share, related to the reversal of deferred tax asset valuation allowances. Results for third quarter 2010 were negatively impacted by restructuring costs of $1.1 million, or $0.02 per share. In addition, third quarter 2010 results were favorably impacted by $4.1 million, or $0.08 per share, related to the reversal of deferred tax asset valuation allowances.

Sven Ruder, President and Chief Executive Officer, comments, "We are pleased with our record third quarter earnings and cash flow. Sales growth is slowing from prior quarters, however at 17%, it remains strong in the face of tougher comparables of a year ago. Sales growth in the Americas and in Europe was good, but sales in the Asia-Pacific region were down from last year, primarily from a decline in sales in China. This slowdown in demand was driven by the Chinese government continuing to tighten monetary policy to rein in inflation. We believe the underlying, long-term growth drivers in China are compelling and the current sales decline is temporary."    

Strengthening Orders and Backlog

The company received new orders of $551.9 million for the third quarter of 2011, a 36% increase compared to third quarter 2010 orders of $406.8 million. Excluding the impact of changes in currency translation rates, orders increased 29%.

Total backlog at September 30, 2011, was $942.3 million, a 41% increase compared to the same period last year of $669.9 million. Excluding the impact of changes in currency translation rates, backlog increased 40%.

Nine Month Review

The company reported net sales for the nine months ended September 30, 2011, of $1,611.4 million, compared to net sales of $1,211.6 million for the first nine months of 2010. Net sales for the first nine months of 2011 increased 28% over the prior year period, excluding the impact of currency translation rate changes.

Net income for the first nine months of 2011 was $202.4 million, or $4.18 per share, compared to net income of $87.4 million, or $1.80 per share, for the same period last year. 2011 results were favorably impacted by $13.7 million, or $0.28 per share, relating to the reversal of deferred tax asset valuation allowances. Results for the first nine months of 2010 include restructuring costs of $8.0 million, or $0.17 per share. In addition, 2010 results were favorably impacted by $18.8 million, or $0.39 per share, relating to the reversal of deferred tax asset valuation allowances.