The flat-on-its-back machinery sector finally may have bottomed out, according to Milacron Inc.'s improved second-quarter results, backed up by June government statistics.
Clouding the picture, however, is a second-quarter report from Davis-Standard Corp. that shows its sales declined from the first quarter.
Milacron said its sales of injection presses have increased compared with the first three months of 2002, while extruders, mold components and related supplies held fairly steady. New machinery orders have flattened out over the last several quarters.
``We believe this is a sign that the recession has bottomed out,'' said Ronald Brown, chairman, president and chief executive officer. But he was cautious, saying officials of the Cincinnati-based company ``have yet to see convincing signs of a recovery.''
Financial reports from both Milacron and Davis-Standard show double-digit declines when comparing the second quarter of 2002 with the same quarter from 2001. But after two dismal years, machinery executives are looking more closely at quarter-by-quarter results, hoping for a turnaround.
Milacron's Plastics Technologies Group reported $145.8 million in second-quarter sales, up 7.3 percent from $136 million in the first quarter. The group had a small loss for the quarter.
The manufacturing recession has hurt spending on new machines. Plastics processors have too much equipment sitting idle. But the Federal Reserve Board reports the capacity utilization rate topped 80 percent in June for the plastics and rubber segment. The utilization rate, which was 76.4 percent in January, has improved in five of the first six months of 2002.
Milacron officials have said the capacity rate needs to reach the mid-80s to spark a solid pickup in machinery sales.
The Fed also reports a steady uptick in U.S. industrial production for plastics and rubber products. From January to June, the production has increased by 8 percent, including a 2.7 percent rise in June.
Harold Faig, vice president of the plastics group, said housewares and construction markets have shown ``fairly good performance'' this year. Automotive is starting to turn around. ``Medical has been strong all year, throughout this whole recession,'' he said.
Faig cited continued weakness from the telecommunications and electronics industries.
Davis-Standard, which makes extruders, film equipment and blow molding machinery, reported second-quarter sales of $44.6 million - down 10.3 percent from first-quarter sales of $49.8 million. Measured against the year-earlier quarter, the decline was 23 percent.
Results from the Pawcatuck, Conn., machinery company are contained in the financial report from parent Crompton Corp. Davis-Standard cited a decline in unit sales, ``driven by extremely low demand for capital equipment.''
Davis-Standard's order backlog at the end of June was $65 million, down $18 million from the end of 2001.
Davis-Standard reported an operating loss of $2.7 million for the second quarter, but the company said that because of cost-reduction measures, that marked an improvement from a bigger loss in the same period a year ago.