Chattanooga area companies with international exposure made a tidy profit this quarter, as others struggled to stay afloat amid anemic domestic conditions, analysts said.
"Astec [Industries'] international sales were up 34 percent, but their domestic sales were up zero," said Jim Campbell, chief investment manager and principal of Campbell Asset Management in Chattanooga.
CBL & Associates Properties Inc. also did well improving its portfolio through several mall sales, and "managing to do well in a difficult retail environment," which Campbell said investors find attractive.
TEXTBOX:Dow Jones Industrial Average, 2010:End of 3rd quarter - 10,788.05End of 2nd quarter - 9,774.02End of 1st quarter - 10,856.63Source: Yahoo
Campbell was also bullish on floorcovering maker Mohawk Industries, which has raised prices between 5 and 7 percent and also has drastically cut costs, he said, resulting in a 40 percent increase in earnings last quarter.
The problem with this style of earnings enhancement is that "You can only cut costs so much, you can only lay off so many people and you can only close so many plants," he said.
The area's banks have been hit hard by new government regulations cutting off income from many fees, and requiring spending more money for compliance, he added.
Chris Hopkins, vice president at Barnett and Co., said he expected slow growth for the next several years, though "we're nowhere near out of the woods."
With the rate of job creation below that needed to accommodate population growth and a housing market "mired in a deep trough," it will be some time before it feels like 2005 again, he said.
Still, he said, the economic growth in the Chattanooga area likely will exceed the rest of the state for the next several years thanks to job creation at Volkswagen and the area's "affirmative business climate."
Contact Ellis Smith at esmith@timesfreepress.com or 423-757-6315. Follow him on Twitter at twitter.com/ellisthered.