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Hurco profit falls as demand for machine tools diminishes

September 2, 2016

Indianapolis-based Hurco Cos. saw its expenses rise and its sales stagnate last quarter, which translated to a 26 percent drop in profit.

The company reported on Friday that its third-quarter profit was $2.7 million, or 41 cents per share, down from $3.7 million, or 56 cents per share, during the same period a year earlier.

Hurco makes computerized machine tools for the metal cutting and forming industry. Its products are sold under the Hurco, Milltronics and Takumi brand names.

Revenue for the quarter was $52.4 million, essentially unchanged from the third quarter of 2015.

North American sales dropped 19 percent in the third quarter, to $13.2 million. In its earnings statement, the company said this was due to pricing pressure and “overall reduced consumption levels of machine tools in this region.” The company also noted an expected slowdown in sales leading up to the International Manufacturing Technology Show, which takes place this month.

European sales dropped by 1 percent, to $31.2 million. This figure includes a negative impact of 3 percent from currency foreign exchange rates.

Sales in the Asia Pacific region rose 66 percent, to $8 million. The company credited the increase to its July 2015 acquisition of the Takumi product line.

Selling, general and administrative expenses for the quarter totaled $12 million, up 6 percent from a year earlier. Hurco said the increase was mostly because of expenses related to its Milltronics and Takumi acquisitions.

“The integration plan for Takumi and Milltronics has been efficiently executed in the last 12 months. We are well positioned commercially and financially to realize a meaningful return on these acquisitions over the next few years,” Hurco CEO Michael Doar said in the company’s earnings statement.

Shares of Hurco were trading at $27.64 on Friday morning, down 1 percent. Over the past year the company’s stock has traded between $23.25 and $33.65 per share.
 

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