By Bob Freund
freund@postbulletin.com
NEW YORK -- Crenlo Inc. wiped away its losses from previous quarters, helping its division of industrial equipment maker Dover Corp. to a 47 percent boost in earnings in the first quarter.
However, financial results remained weak companywide, and "the timing of an economic recovery and impact on the capital spending of many of our companies' customers is still unclear," chairman Thomas L. Reece said Monday.
The New York-based conglomerate reported first-quarter profits of $45.1 million, or 22 cents a diluted share for all operations. Earnings were off 42 percent from a year earlier, while sales declined 17 percent to $1.01 billion.
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Dover also chose Jan. 1 to make an accounting change that lopped $293 million in "impaired" goodwill -- $345 million before taxes -- out of its financial statements. That subtraction resulted in a total loss of $247.9 million, or $1.22 a share, for the quarter.
The accounting change pulled down the value of Dover's 41 business on company books to their current market values.
Dover Diversified, which includes Crenlo, took the largest hit due to the accounting change. The values of its companies dropped a combined $148 million.
Nonetheless, Diversified's operations in the first quarter looked better than in the year-ago quarter. The unit posted $30 million in earnings, up from $20.5 million in the first quarter of 2001, Dover announced.
"The primary reason for the earnings improvement …; was the elimination of losses at Crenlo, largely due to internal improvements," the company said in its written release. Crenlo's sales were roughly the same as a year ago, though, showing continued caution among its customers.
Diversified's overall sales rose 14 percent from a year ago. It was the only Dover division to enjoy a revenue increase.
The Dover Technologies group fared worst, with sales plunging 46 percent, or almost $198 million.
