Profits improve for companies on Star 60

By Alex Gary

BusinessRockford.com

Aggressive cost reductions and job cuts are helping companies on the Register Star’s Star 60 stock index, which could signal the end of large-scale layoffs.

So far, 49 of the 60 companies on the index, which tracks publicly traded companies important to the local economy, have released quarterly earnings, 25 of them reporting improvements.

That number already surpasses the 17 companies that reported improved net earnings in the July through September reporting period. And companies on the index were on track to have perhaps the best round of earnings since the July through September 2008 reporting period.

Among the companies that swung from declining to improved earnings this period are such major local employers as Ecolab Inc., Exelon Corp. and Thermo Fisher Scientific.

The fact that earnings are improving heading into the holiday seasons is very good news for the area’s work force. It shows many companies have hit the bottom of the current business cycle and can begin looking to grow revenues again.

A look at just the local jobless numbers shows how much companies have cut back. At the end of September 2008, there were 15,600 people applying for jobless benefits in Boone and Winnebago counties. At the end of September 2009, there were 27,340 on unemployment benefits.

Of course, the improved bottom lines are mostly coming from cost reductions. Of the 25 companies that reported better net earnings, only seven of them reported revenues above the same period from last year.

Star 60 companies releasing earnings this week are Valspar Corp. on Monday, Hormel Foods Corp. on Tuesday and Deere & Co. on Wednesday.

Reach Assistant Business Editor Alex Gary at 815-987-1339 or agary@rrstar.com.

MULTIMEDIA
Graphic: Star 60 earnings trends
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