Philadelphia-area manufacturers have spoken, and what they said, as a whole, isn't encouraging.
After hovering on the edge in recent months, manufacturing here is contracting, according to the latest survey by the Federal Reserve Bank of Philadelphia - a much-watched measure of the economy.
But a closer look at a couple of manufacturers with headquarters in the region provides more nuance on what's happening, and of what's ahead.
There's still some cautious hope out there - especially for exporters.
Office-furniture-maker Knoll Inc., of East Greenville, in far northwestern Montgomery County, issued robust quarterly earnings yesterday thu on the heels of a bullish financial report late Wednesday 10/15 from can-maker Crown Holdings Inc., of Philadelphia.
STOX closes needed here for KNL and CCK: On another day of wild market swings, shares of both companies rose yesterday. thu Knoll's stock price closed up cq, ps $1.39 at $11.70. Crown finished up cq, ps $2.44 at $20.56.
Knoll, which has about 4,000 employees, said that third-quarter profit surged 31 percent from a year earlier and that sales were on track to exceed $1 billion this year.
You might think the immediate future is grim for a company that supplies office cubicles and ergonomic chairs. Think again, say Knoll executives.
Analysts in a conference call yesterday thu with chief executive officer Andrew Cogan and others asked how the numbers can be so good in the shaky economy. Knoll even ended the quarter with a $203 million backlog of orders - 19.6 percent more than a year earlier.
"We're going to get hit" in 2009, the chief executive acknowledged.
But, Cogan said, it won't be anything like "the mother of all bumpy rides" that Knoll weathered early in this decade, when the U.S. office market virtually collapsed.
What's different now, Cogan said, is that Knoll has expanded into foreign markets and into education and health care - moves that could cushion the hit.
"We're not going to be impervious to what goes on in the world, but we are better diversified . . . and much less vulnerable than we were to a decline in North American offices" after the dot-com bust, he said.
Crown, which employs 24,000 and, among many things, makes cans for Coca-Cola, beer, anchovies and aerosols, was also grilled by analysts yesterday thu about its performance. The company reported third-quarter profit growth of 23 percent, partly on the strength of its global beverage and food can businesses.
CEO John Conway said the outlook for Crown remained positive, in part, because of the looming recession.
"As people stay at home and they consume more at home, cans are the preferred package," especially for beer and soft drinks, he said.
Mike Armstrong is away. Contact Reid Kanaley at 215-854-5114 or firstname.lastname@example.org.
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