CE Index leads recovery with 20% gain in 4Q02

Stock Index

Step aside and let a winner lead the way. Even though 4Q02 was poor for the economy, and even as other markets improved somewhat, the controls industry showed more definite signs of recovery. While the Dow Jones Industrial Average increased about 10% and the NASDAQ rose about 14% during the quarter, theControl EngineeringIndex shot up 20%, outstripping the other two indexes during 4Q02.

This new investor confidence in the controls industry also was reflected in the Market Value Index, which took a very favorable leap in 4Q02 after declining for two consecutive quarters. The main reason for this gain was much-improved performance of the index’s two largest companies. Emerson, accounting for 15% of the index’s total value, saw its market value jump by 16%. Meanwhile, Siemens, which accounts for 27% of the index’s value, gained 27%.

Likewise, the Earnings Per Share (EPS) Index showed a similarly sizeable increase in 4Q02, following a threatening third quarter. EPS was helped by a much-improved earnings picture from Honeywell, which gained 111%, while Emerson improved by 33%. Only one large company in the CE Indexes, Tyco, showed negative earnings for 4Q02. Tyco had negative earnings in 3Q02, following two positive quarters. Only one small company showed negative earnings, while the rest were flat or had gains as high as 148%.

The hope is that improved performance by the controls industry in 4Q02 will continue, and possibly lead a broader recovery among other industries, especially those that use control and automation solutions. Our industry may not be recognized as a leading indicator, but there is no doubt controls rely heavily on capital spending. It’s these increases in capital spending that will hopefully push, drag, shove, or heave the rest of the economy into positive territory.

Control EngineeringStock Index

Stock price s($) at close 9/30/02	($) close 12/30/02	% chg. in 4Q02	52-wk。高	年度div.yield	价格/收入。ratio	12-mo. EPS ($)
Ametek Inc.29.12	38.49	32.18	40.71	0.06	17	2.21
Badger Meter Inc.30.50	32.10	5.25	34.00	0.26	15	2.19
Danaher Corp.56.85	65.70	15.57	75.46	0.02	30	2.18
Eaton Corp.63.74	78.11	22.54	88.68	0.44	23	3.40
Emerson Electric Co.43.94	50.85	15.73	66.09	0.39	20	2.52
Flowserve10.00	14.79	47.90	35.09	0.14	12	1.26
Honeywell Inc.21.66	24.00	10.08	40.95	0.19	14	1.67
K-Tron International12.70	13.00	2.36	18.00	0	12	1.07
National Instruments21.89	32.49	48.42	43.50	0	59	0.54
Rockwell Automation16.27	20.71	27.29	22.79	0.16	17	1.22
Siemens33.61	42.13	25.35	70.50	0.79	14	2.36
Thermo Electron16.13	20.12	24.74	24.60	0	18	1.12
Transmation Inc.1.20	1.88	56.80	2.49	0	-2	-0.91
泰科国际有限公司14.10	17.08	21.13	58.81	0.01	-3	-4.59
EPS = earnings per share Div. = dividend Yield = % based on closing price NC = not calculable due to negative numbers Source: Control Engineering with data from Cnet Networks Inc. (San Francisco, CA,www.investor.cnet.com, 415/344-2836)

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