Federal Signal Corp. (FS) took a 66% hit in net income, to $2.2 million, from $6.5 million earned in 1Q ’03. Weak operating margins in its fire rescue products, increased corporate expenses, and one-time costs associated with legal settlements were cited as major factors in the company’s weak profits.

Its fire rescue group— previously the company’s bread and butter— showed a 27% reduction in sales, to bring in $71.5 million. The refuse group is now its number one division, with an 8% sales increase to $91.1 million.

Its other groups, safety products and tools, also showed increased sales, by 3% ($69.2 million) and 8% ($44.6 million), respectively.

“As expected, U.S. municipal markets remain weak; we are not counting on improvements from municipal and government customers during 2004,” said Robert Welding, FS president & CEO. “Given the continued volatility of fire rescue production and our formative restructuring plans, we remain unable to forecast 2004 operating earnings with confidence.”