Jobs down in 3Q ’03, but other signs point up

The third quarter of 2003 (3Q03) seemed to bring good news to many sectors of the U.S. economy. The nation’s GDP appears to be heading for a 4% increase, which would be good news for everybody. It showed more than a 3% increase in 3Q03. TheControl EngineeringIndex gained more than 10% during the third quarter, indicating that its member companies performed well as a group. This was paralleled by the 10% increase for 3Q03 in the NASDAQ index.

Besides the performance of their stocks, the earnings picture for many controls and automation manufacturers continues to improve. TheControl EngineeringEarnings per Share Index showed a marked increase in 3Q03, as it did in the previous quarter. Only two companies showed negative earnings, compared to four companies in 2Q03.

TheControl EngineeringMarket Value Index showed a slight 3Q decline, smaller than the 2Q gain. This index is influenced, of course, by the size of participating companies, two of which account for 50% of the total market value in the index. Although Siemens showed a significant increase of 31% and Tyco posted a moderate 7%, these values could not overcome the 3Q03 decline of Honeywell (primarily due to higher pension expense), the index’s third largest company, as well as the modest gains by the index’s other firms.

The slow rebound of the U.S. economy has been thus far accompanied by a relatively low employment rate, though it was hoped that the recovery would quickly translate into more jobs. Advanced automation technologies continue to boost productivity despite the loss of more than 600,000 manufacturing jobs in the past year.

Control Engineering Stock Index

Stock prices ($) at close 6/30/03	($) at close 9/30/03	% chg. in 3Q03	52-wk high	Annual div. yield	Price/ earn. ratio	12-mo. EPS ($)
Yield = % based on closing price, EPS = earnings per share, Div. = dividend Source: Control Engineering with data from Financial Content Inc. at www.financialcontent.com .
Ametek Inc.36.6	42.86	16.94	44.76	0.56	17	2.56
Badger Meter25.75	32.00	24.27	34.00	3.25	15	2.09
Danaher Corp.68.05	73.86	8.54	78.62	0.14	23	3.32
Eaton Corp.78.61	88.62	12.73	95.43	1.99	20	4.57
Emerson Electric51.10	52.65	3.03	56.91	2.98	21	2.53
Flowserve19.67	20.30	3.20	22.86	0	24	0.86
Honeywell26.85	26.35	-1.86	30.07	2.85	-44	-0.61
K-Tron International14.73	17.00	15.41	18.99	0	12	1.40
National Instruments37.95	40.08	5.61	43.80	0	67	0.60
Rockwell Automation23.84	26.25	10.11	28.59	2.51	19	1.44
Siemens48.85	9.41	21.62	65.23	0	27	2.29
Thermo Electron21.02	21.70	3.24	23.59	0	17	1.32
Transmation Inc.1.61	2.90	80.12	3.07	0	9	0.34
Tyco International Ltd.18.98	20.43	7.64	21.98	0.24	-870	-0.02

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