American Standard reported higher fourth-quarter profit and said it would separate its three businesses.
The Piscataway, N.J., company said it would sell its bath and kitchen business, which has posted weaker results, spin off its vehicle-controls unit, and retain its heating and air conditioning business but change the name to Trane, which is one of the unit's brand names.
"The continuous under-performance of the bath and kitchen businesses has overshadowed top-tier performances from Trane and WABCO," the vehicle-controls business, Deutsche Bank analyst Nigel Coe said in a research note.
He also said the company's operating results seemed "quite weak."
In a statement, American Standard Chairman Fred Poses said the separate businesses would have greater strategic focus and better market recognition.
American Standard said it planned to complete the bath and kitchen sale and vehicle-control spinoff by early fall.
Poses will continue as chairman and chief executive of American Standard through 2007 as planned, and an internal and external search is under way for his successor, the company said.
Jacques Esculier, the current president of the vehicle controls unit, will become CEO in the spinoff of that company, which will be called WABCO.
For the fourth quarter, the company reported net income of $114 million, compared with $64.4 million. On an adjusted basis, it said per-share profit was 51 cents in the fourth quarter, up from 44 cents a share for the 2005 period.
For the quarter, total sales were up 8%. Among the units, air conditioning had a sales increase of 4%, while segment income rose 11% as commercial pricing improved. Vehicle-control sales rose 18% while segment income gained 22%.
Bath and kitchen sales were up 1.6%, but the unit posted a loss of $3.7 million as higher prices were not able to offset rising commodity costs and lower unit volume.