Monday, Fushi Copperweld, Inc. (FSIN), a manufacturer of bimetallic wire products, reported a fall in first quarter results, as revenues dipped year-over-year owing to a decline in copper prices. Providing an outlook for the full year, the company said it expects second quarter earnings above the current Street estimate.
The Dalian, China-based Fushi Copperweld's first quarter net income declined sharply to $3.1 million or $0.11 per share, from $7.6 million or $0.26 per share reported in the prior-year quarter.
Adjusted non-GAAP net income was $3.9 million or $0.14 per share, down from $7.8 million or $0.26 per share in the comparable period last year. Adjusted non-GAAP net income excludes certain expenses related to changes in fair value of derivative liability and share-based compensation. Analysts polled by Thomson Reuters expected the company to earn $0.12 per share. Analysts' estimates typically exclude special items. Quarterly revenues fell 34.6% to $35.3 million from $54.0 million in the prior-year quarter, due to a 22% decrease in average selling price and 13.8% dip in tons sold. The Street estimated revenues of $41.05 million.
Li Fu, chairman and chief executive officer of Fushi Copperweld, said, "The first quarter, which is our seasonally slowest quarter, was a challenging one for Fushi Copperweld. Seasonality, combined with a global economic malaise and dramatic declines in copper prices all factored into our first quarter results."
Revenue from Dalian, China facility was $26.4 million and $8.9 million at Fayetteville, Tennessee and Telford, U.K. facilities. The company's Fayetteville facility experienced a 37% decrease in volume as a result of the global economic downturn.
Gross profit in the first quarter decreased 39.5% year over year to $8.9 million from $14.7 million. Gross margin slipped to 25.4% from 27.3% in the prior-year period.
Looking forward, for the second quarter, the company expects adjusted earnings per share in the range of $0.21 to $0.25 per share. Analysts are looking for earnings of $0.19 per share.
Further, the company said it expects profitability to improve sequentially throughout 2009 due to continued growth in demand, increased profitability at the Fayetteville facility as a result of cost saving initiatives, and increased revenue from China's 3G infrastructure investments and the $585 billion stimulus package.
FSIN is trading at $6.77, down $0.19 or 2.73% on a volume of about 388 thousand shares.
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