EVERETT — Unova Corp. could be profitable again in the next year, thanks to the yearlong restructuring of its industrial operations in the Midwest and continued success for its Intermec Technologies division.
The Everett-based corporation reported a net loss of $1.3 million, or 2 cents a share, for the third quarter. During the same quarter last year, it recorded a profit of $14.3 million.
While the company’s continuing operations made a profit of $4.1 million, that was outweighed by losses from operations either sold or closed by Unova.
The latest quarter’s performance still was notably better, however, than the loss of 13 to 14 cents a share forecasted by numerous analysts.
After the quarterly results came out, investors on Monday sent Unova’s stock price soaring by more than $2 to well over $20 a share. The stock ended the heavy trading day at $19.55, up $1.78 or 10 percent. That’s the stock’s highest close in more than five years.
But Unova’s chief executive officer, Larry Brady, said improvement is still needed in its industrial division, which makes assembly line machines and precision grinding systems. After the division lost millions in 2002, Unova has made reductions equaling an annual savings of $40 million.
Those moves have included consolidating plants, selling some operations and laying off workers. Despite that, the industrial division still lost $6.4 million during the third quarter.
"Thus, we will fall short of our break-even objective," Brady said. "There are two paths to resolve the remainder: further headcount reductions and improved margins."
The further restructuring and a recent pick up in orders for the division should result in returning to at least the break-even point by next year, he said.
For Unova’s data systems division, which consists of Intermec Technologies in Everett, the last quarter was considerably brighter.
The division continued to generate the majority of Unova’s gross revenues, making just less than $179 million during the quarter. The resulting profit for Intermec came to $22 million.
While Intermec’s sales dipped sharply for a brief period in late August, they subsequently surged last month and have returned to normal levels during the past few weeks, Brady said. Overall worldwide sales increased 4 percent.
Wireless mobile computers and related products have continued to sell well, he added. But increasing interest in radio frequency identification technology (RFID), which can closely track products in warehouses, has Intermec’s leaders especially hopeful.
"No single event has dominated the quarter more than the discussion of our RFID and Wal-Mart’s historic announcements in June," Brady said, referring to the retailer’s decision to require its top 100 suppliers to use RFID inventory tracking tags by 2005. The U.S. Department of Defense has announced a similar initiative.
As a result, Intermec will showcase its RFID products at Wal-Mart’s headquarters and for the Department of Defense during the next three months. Brady expressed optimism about Unova’s position versus potential competitors in the emerging market.
Financially, Unova’s also on more solid ground, said Michael Keane, chief financial officer. For the first time since being spun off as its own company in 1997, the company’s debt is smaller than its cash reserves.
"The balance sheet is strong and provides us the proper foundation to invest in Unova’s growth," Keane said.
Earlier this month, Unova became only the second company based in Snohomish County to have a market capitalization exceeding $1 billion. The company, which relocated its headquarters from California to Everett earlier this year, also reported assets of just over $1 billion as of Sept. 30.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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