Sun Hydraulics (SNHY) Q2 2016 Earnings Call

Sun Hydraulics (SNHY) CEO Wolfgang Dangel said sales in North America were the laggard during the quarter

“Second quarter demand was slightly better than anticipated, gross profitability remained in line with company estimates. Regionally, Europe and Asia were each down only marginally. The Americas experienced the greater part of the decline year-over-year primarily attributable to the continued impact lower oil prices and lack of investment in the mining sector.  If you have been following the economy and if you see how Sun is aligned in terms of their end-market, some of the other sectors that we operating in have been soft for quite number of quarters already, agriculture, forestry, material handling, softening even the contraction sector has shown some recent signs of weakness. So if you look at the portfolio and the way we aligned up to these end-market, is actually not a very big surprise.”

Yet Asia remained the bright spot

“Looking forward, Brexit and the geopolitical climate impair our visibility of the future. We are encouraged however, by increased demand in selected markets throughout Asia Pacific with considerable sales to China, Australia, India and Japan. We feel the success in these markets is directly attributable to our increased marketing efforts in these regions.”

They are investing in the future despot the challenging global macroeconomic landscape

“Despite today’s uncertainty, we continue to make investments that will strengthen Sun’s market position now and looking forward. We are accelerating the manufacturing efforts, expanding our electronic and digital capabilities, acquiring talent to complement our current competencies and acting on opportunities where we can grow in both new and existing geographic regions.”