Friday, Graham Corp. (GHM), a manufacturer of vacuum and heat transfer equipments, reported a decline in earnings for the first quarter, hurt by a 27% decline in sales that reflected the contraction in refinery and petrochemical equipment markets. However, earnings surpassed analysts' consensus by 20 cents. The company also reaffirmed its revenue outlook for the full year ending March 31, 2010.
For the first quarter, the Batavia, New York-based company's net income dropped 38.1% to $3.5 million or $0.35 per share from $5.7 million or $0.56 per share in the year-ago period.
On average, three analysts polled by Thomson Reuters expected the company to earn $0.15 per share. Analysts' estimates typically exclude one-time items.
The provider of equipments for the oil refinery, petrochemical and power industries witnessed a 27.2% decline in net sales to $20.1 million in the first quarter, from $27.6 million in the prior-year period. Analysts expected revenues of $18.82 million.
Orders received during the quarter were down substantially to $8.8 million from $27.8 million in the prior year's first quarter, and the declines were across all product categories.
Geographically, U.S. sales declined 44.9% to $10.2 million, while International sales rose to $9.9 million from $9.0 million, contributing to 51% and 49% of total sales respectively. Going forward, the company expects international sales to contribute to larger portion of future revenues in fiscal 2010 and beyond.
Capital expenditures declined to $80 thousand from $219 thousand in the prior-year quarter. Capital expenditures in fiscal 2010 are expected to aggregate approximately $1.0 million.
Going forward, for fiscal 2010, the company said it expects to be profitable, and also reaffirmend its revenue guidance range of $60 million to $70 million. Consensus estimate calls for earnings of $0.41 per share on revenues of $70.85 million for the year.
The stock is currently trading up 6.77 % at $14.2 on AMEX.
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