Cold-rolled steel products maker China Precision Steel, Inc. (CPSL) reported Monday a loss in the third quarter, reflecting a sharp decline in customer orders and lower average selling price amid global economic downturn.
For the third quarter, net loss was $3.5 million or $0.08 per share, compared to net profit of $3.6 million or $0.08 per share in the previous year.
Revenue for the quarter fell 59.4% to $7.6 million from $18.8 million in the same period last year, chiefly attributable to lower sales volume across all product lines and decline in average selling price in the undermined steel industry.
Sales volume was down 54.7% year-over-year to 11,000 tons and average selling price decreased 10.3% to $693 per ton.
Wo Hing Li, China Precision Steel's chief executive said that the economic slump and the credit crunch severely affected the steel industry hampering customer orders during the quarter.
For the nine-month period, net loss was $2.6 million or $0.06 a share, compared to net income of $13.0 million or $0.30 a share in the year-ago period. Revenues for the period came down 14.6% to $50.5 million from $59.2 million last year.
Li noted, "While near-term visibility for the steel industry remains limited, we believe that the implementation of several economic and industry stimulus packages are helping to restore stability and reaccelerate global growth. Moreover, China is still in the middle of a grand scale modernization and industrialization which we believe supports long-term demand for precision steel products,"
CPSL is currently trading at $2.23, down $0.57 or 20.36%, on the Nasdaq.
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