Two automation vendors catering to process industries reported strong top-line numbers for their latest fiscal cycles, but both Invensys plc and Emerson Electric are undergoing restructuring efforts to ensure that they stay afloat amid uncertain economic conditions.
Invensys fared well in the first half of its fiscal 2008/09 year, ended Sept. 30, 2008. Orders rose 16% (8% at CER), generating an operating profit of £120 million, a 12% year-over-year increase. That’s a turnaround from a 2% order decline the company reported in March at the close of its 2007/08 fiscal year, resulting in a mere 6% revenue increase.
Despite the strong order pipeline, overall revenue for the first half of the year was flat, at £1 billion, compared with the same period last year. But given the strength of its two long-cycle businesses, Process Systems group and the Rail group, and a shift to an integrated solution sell, executives said they are in good shape to ride out a potential economic storm in 2009.
Process Systems and Rail orders were up 10% (CER) and 44% (CER), respectively. Process Systems revenue, which includes the Wonderware business unit, climbed to £425 million from £379 million in the previous period. However, operating profit for the group fell 17% (CER) to £41 million. That’s due to a strategy realignment that has led to an investment in sales and marketing.