Dresser-Rand Group plans to close a factory in Millbury, Mass., in a move that will save the company $15 million a year as it consolidates its steam turbine business following its acquisition of Tuthill Energy Systems last September.
The Olean-based company also cut its earnings forecast for the current quarter, although it said profits for the full year still should be in line with analyst expectations.
Dresser-Rand said its operating earnings, excluding one-time gains, will range between 3 cents and 5 cents per share, well below the 19 cents that analysts surveyed by Thomson Financial/First Call were expecting.
But company officials said Dresser-Rand still should finish the year with earnings in line with analyst forecasts of $1.21 per share.
Dresser-Rand acquired the Massachusetts factory last year when it purchased Tuthill, leaving the company with excess capacity that had placed some of its plants in jeopardy. Workers at Dresser-Rand's Wellsville plant last month approved a new contract that slashed wages and benefits amid threats from company officials that the Southern Tier factory could be closed.
Dresser-Rand also is moving to cut costs by consolidating its back-office operations, and revising its product offerings, distribution and sales networks.
The restructuring moves will save Dresser-Rand about $10.5 million this year, after the company absorbs $4.5 million in extra integration costs, the firm said. Dresser-Rand also expects to book a $12 million gain during the current quarter to reflect lower future costs of retiree health benefits.
"These actions will result in improved products and services offerings for customers, while better positioning Dresser-Rand to be cost competitive," said Vincent R. Volpe Jr., the company's chief executive officer, in a statement.
Dresser-Rand said it reduced its debt by $30 million during the first two months of this year, which will cut its interest costs by about $1.8 million. The company said it plans to reduce its debt further this year.
The company said its order bookings were strong during the fourth quarter, reaching $410 million, which is 42 percent more than during the third quarter and 36 percent more than a year ago.