Recent news from two publicly held companies, Milacron Inc. and Husky Injection Molding Systems Ltd., signal a slowdown for plastics machinery.
But some machinery company officials shrugged off the reports. Press sales may be flat, they say, but that is after five strong years that rank as some of the best ever.
``So it's down this quarter? Relatively speaking, it's at a level that's really great, and even if it's down, nobody should be complaining,'' said Ken Vaughan, marketing manager at Van Dorn Demag Corp. in Strongsville, Ohio.
But for public companies, looking back doesn't help. Investors want to know what to expect next quarter.
On June 28, Milacron answered: Companywide, profit will be down about 10 percent in the second quarter from the year-earlier period. Its Plastics Technologies Group in Batavia, Ohio, should see second-quarter sales remain flat or decline slightly, excluding the Uniloy blow molding business, which Milacron acquired last fall.
Milacron's second quarter ended June 30. Actual numbers have not been released yet.
Milacron cited slow demand in small-tonnage injection presses, and some softness in extruding and blow molding machines in Europe and Asia. Its mold-base subsidiary, D-M-E, continues to perform well.
For Milacron, the announcement marks a concession that 1999 will be slower than the company had anticipated.
``Despite recent encouraging signals ... and continued strength in automotive and consumer sectors, the anticipated recovery in the industrial sector has yet to fully materialize,'' Daniel Meyer, chairman, president and chief executive officer, said in a statement.
Milacron has cut 5 percent of its worldwide work force, but the company did not detail where the cuts came from.
``We don't see quite as many large programs coming through now. I don't think we've lost any, but I think some have been delayed, possibly because of mergers and consolidation among custom molders,'' said Bill Gruber, vice president of U.S. operations for Milacron's Plastics Technologies Group.
But Gruber, in a telephone interview, said all indicators still point to a strong U.S. economy - which bodes well for machine sales.
Milacron issued its revised outlook two days before the Federal Reserve raised interest rates a quarter-point, tapping the brakes on the mighty U.S. economy. Gruber and other machinery officials say the Fed's quarter-point rate hike will not dampen consumer spending, which accounts for nearly 70 percent of U.S. economic growth. On June 29, the Consumer Confidence Index rose for the eighth consecutive month.
Michael Urquhart, vice president of marketing at Husky, said North America accounts for about half the firm's business.
``Certainly we see North America having another strong year for growth,'' he said.
Husky, based in Bolton, Ontario, has blamed its recent problems on Europe and Asia. Husky has issued several statements this year warning investors about lower-than-expected performance for its fiscal 1999, which will end July 31. The company recently announced it will close a large-tonnage injection press assembly operation in Pittsfield, Mass., and move it to Luxembourg.
Machinery executives gave mixed reactions to Milacron's comments that small-press sales are soft.
Husky last year introduced a line of small-tonnage injection presses, and Urquhart said the company has not experienced the slowing cited by Milacron.
``We've had a very successful launch,'' he said.
A spokesman at small-press-builder Arburg Inc. in Newington, Conn., said business is about even with last year.
But Michael Santa, executive vice president at Florence, Ky.-based Krauss-Maffei Corp., agreed with Milacron: ``We've seen a very sluggish market in the smaller-tonnage market.''