Cooper 1Q Net Down 35%; More Job Cuts Planned, View Bearish

Cooper Industries Ltd.'s (CBE) first-quarter net income dropped 35% amid weaker-than-expected sales at the electrical products and tool manufacturer.

That prompted the company to lower its full-year forecast and give a second-quarter view below Wall Street's expectations.

The electrical products and tool manufacturer also said it cut another 650 jobs in the quarter, on top of an expanded 2,200 layoffs in the fourth quarter. Cooper employs roughly 30,000 people.

Cooper now expects 2009 earnings of $2.30 to $2.60 and revenue down 17% to 21%. The company's January view was a profit of $2.45 to $2.80 and sales down 10% to 15%.

For the second quarter, it expects earnings, excluding items, of 50 cents to 60 cents share on a revenue decline of 21% to 26%. Analysts surveyed by Thomson Reuters were expecting 60 cents a share on a revenue drop of 17% to $1.43 billion.

"While we are seeing some signs of stabilization in our markets, we expect to continue to focus on rightsizing our businesses for current market conditions," said Chairman and Chief Executive Kirk S. Hachigian. He noted Cooper failed to receive its "normal" seasonal boost in March as customers pared back inventory, driving revenue below forecasts.

The company reported first-quarter net income of $100.1 million, or 59 cents a share, down from $153.4 million, or 86 cents, a year earlier. Excluding items including restructuring charges, earnings from continuing operations fell to 47 cents from 81 cents.

Revenue fell 19% to $1.26 billion.

Cooper's January's projection was 45 cents to 65 cents on a revenue decline of 10% to 15%, below Wall Street's estimates at the time.

Gross margin fell to 29.6% from 33.9% amid the sales decline.

Revenue in the company's key electrical products segment, which includes circuit-protection equipment, lighting fixtures and wiring devices, fell 17% as profit slumped 37%.

Cooper shares closed Wednesday at $29.16 and were inactive premarket. The stock is down 40% the past eight months.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; [e-mail];