Cooper Industries plc (CBE) has introduced a range of products for more efficient energy consumption as well as lower maintenance requirements.
Cooper Power Systems’ new Triplex Indoor Power Center (IPC) aims to achieve 35% reduction in energy costs, a 20% reduction in HVAC costs and a 50% reduction in noise levels. Cooper Lighting’s outdoor LED products present the most extensive choice of fixtures and optical distributions aimed at superior performance and energy savings. Cooper Crouse-Hinds offers a wide range of LED luminaire options suitable for use in industrial and hazardous applications. Cooper Wiring Devices’ new CORE line of lighting control devices helps to meet green initiatives and comply with energy saving regulations.
Cooper has several growth opportunities in the current year, by way of stimulus spending, restructuring benefits and accretive capital allocation in the form of share repurchases or mergers and acquisitions. However, if Congress decides to retroactively reverse tax inversion legislation, CBE’s tax rate would be higher than expected, which will affect earnings. While earnings risk still remains, we believe that the previous year marked the bottom of the earnings cycle.
CBE will likely realize an outsized portion of its growth from developing markets in China, the Middle East and Mexico. Industrial, utility and energy markets are expected to rapidly expand. Industrializing economies will help offset some of the declines in already developed regions. This will eventually help support higher growth rates for the current year.
Pressures in commercial markets will continue to be a drag on earnings throughout the current year. However, numerous items such as lighting retrofit, government spending, energy efficiency projects and stimulus will help buffer underlying pressure. Residential markets appear to have bottomed out and should experience modest growth. The company is well positioned to capitalize on the potential for renewed spending on transmission and distribution products as utilities begin to open up their spending again.
Cooper Industries plc is a global manufacturer, with 2009 revenues of $5.1 billion, approximately 89% of which were from electrical products. Cooper has manufacturing facilities in 23 countries and currently employs approximately 28,000 people.
We currently have a Neutral recommendation on Cooper.
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