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Profits surge for many Tampa Bay public companies

Stuck in the full throes of our national economic funk a year ago, uniform maker Superior Uniform made some bold moves.

It eliminated more than 60 jobs at its Seminole headquarters, moving some workers to a recently-created, less expensive, back-office operation in El Salvador. Between the end of 2008 and mid 2009, it chopped annual payroll costs by $4 million.

Last week came the payoff as it reversed a $503,000 loss in the year-ago quarter into a $508,000 profit for the quarter ended March 31. Sales were up 10 percent from last year.

"In this economy, I don't want to say we're optimistic," Superior Uniform's chief financial officer Andrew Demott Jr. said Friday. "But we feel pretty good about where we're at, and we think things will start picking up."

Don't look now, but many of Tampa Bay's public companies are enjoying a similar profit surge.

Last week, Raymond James Financial said its quarterly net income rose nine-fold over last year and Lincare Holdings posted a 68 percent jump in profits. Local heavyweights Tech Data and Jabil Circuit, which have unusual fiscal calendar years, both reported strong quarters last month.

Many of the remaining top public companies in the region such as WellCare Health Plans, TECO Energy and HSN, won't report quarterly financials until early May.

But if the trend holds, it could mean the bay area is getting its corporate mojo back.

"What we're seeing with corporate earnings is completely consistent with an economy emerging out of a severe and protracted recession," said Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness.

"Companies have become leaner, more productive. Now you add to that a revenue side finally starting to show some life and that helps drive the profit picture."

But just because companies are posting higher profits doesn't mean they'll be posting "Help Wanted" ads soon. Consider a couple factors:

• As in Superior Uniform's case, profits are being driven by a slimmed-down workforce pushed to high levels of productivity.

• Secondly, as Raymond James chief Tom James points out, the current numbers are being compared with a year ago "during the bleakest days of the financial meltdown." Sales were stagnant and stock markets hit their recessionary lows in March of 2009.

Because revenues were so lethargic in 2009, any increases companies are posting now look better than they are, Snaith said.

"We're seeing consumer spending grow, but we're not seeing a tremendous acceleration," he said. "That will probably delay the need for businesses to go out and hire."

In other words, he added, it's further evidence we're experiencing a "jobless recovery."

Florida's unemployment rate hit 12.3 percent in March, the highest since the state began tracking jobless figures in 1970. Economists widely expect it to inch up further this year before beginning a slow retraction, possibly in the latter half of 2010.

Adding to the labor market's woes: employee turnover is low, so fewer positions are opening up for the jobless.

"People aren't giving up the good jobs that they have," said Demott of Superior Uniform, which sells more uniforms when companies bring on new workers.

Demott said he talks to customers in the grocery business who used to have worker turnover rates of 200 to 300 percent annually. Now, it's probably "well below" a 100 percent turnover rate, he said.

That's enough to restrain any enthusiasm over his company's double-digit increase in sales.

"This economic environment … is different than anything most of us have been in during our lifetime. You just don't know when it's going to end," Demott said.

"All the signs point to things getting better, but everybody's cautious after last year."

Jeff Harrington can be reached at jharrington@sptimes.com or (727) 893-8242.

Profits surge for many Tampa Bay public companies 04/24/10 [Last modified: Friday, April 23, 2010 9:07pm]
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