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Once-booming Pentair will cut 1,600 jobs
The Golden Valley company is the third Twin Cities manufacturer to slash its payroll this week.
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The rocket-like growth of water filtration giant Pentair, Inc. petered out Thursday as the company slashed earnings expectations and announced 1,600 job cuts after sales plummeted 9 percent in the fourth quarter.
The job cuts represent 10 percent of the Golden Valley pump-and-water-equipment maker's total global workforce. The company also said it will close 15 facilities. Eight recently closed and the rest will shutter by the middle of next year, officials said.
While none of the plant closings will take place in Minnesota, 110 jobs are being eliminated here. Golden Valley-based Pentair operates plants in Anoka, Champlin, New Brighton and White Bear Lake.
Pentair's dramatic downsizing lies in sharp contrast to the growth it experienced in recent years after divesting its tools business and gobbling up water equipment companies around the globe.
Sales more than doubled from 2003 to 2007, growing from $1.6 billion to $3.4 billion. Nearly a third of Pentair's revenues now comes from overseas projects.
The company quietly began cutting jobs in September and expects to complete the 1,600 layoffs by the end of the month, said spokeswoman Rachael Jarosh.
Fourth-quarter earnings are now expected to drop to 40 to 42 cents a share, down from an earlier estimate of 52 to 55 cents. Full-year earnings are now expected to hit just $2.19 to $2.21 a share rather than the previous forecast of $2.28 to $2.31.
In a statement Pentair said it expects fourth-quarter sales to drop by $70 million to $770 million "due to sharp volume declines" in its technical products business as well as certain industrial, commercial and residential water businesses.
While company executives started cutting costs in the third quarter, they said "global economic conditions declined more quickly and intensely than forecasted."
Pentair is the third Twin Cities manufacturer to announce job cuts this week, joining Tennant Co. in Golden Valley and Graco in Minneapolis. It also joins 3M Co. and Hutchinson Technology, which last week announced 3,300 in combined job cuts.
Pentair said it will also freeze hiring, eliminate annual salary increases and cut indirect costs and capital expenditures.
Pentair also reduced its 2009 guidance, saying it expects sales to drop 8 to 10 percent and earnings of just $1.70 to $2 per share, which is down about 23 percent from the newly revised 2008 results. Pentair's stock price fell $1.14 a share Thursday to $23.75 a share.
Dee DePass • 612-673-7725
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