Tuesday, military body-armor maker Ceradyne, Inc. (CRDN) reported a drop in third-quarter profit on lower revenues while its gross margin and number of new orders took a hit. The company trimmed its fiscal 2009 guidance and provided fiscal 2010 earnings outlook above Wall Street estimates.
The Costa Mesa, California-based company's third quarter net income dropped to $4.9 million or $0.19 per share from $18.82 million or $0.71 per share a year ago.
On average, 10 analysts polled by Thomson Reuters estimated earnings of $0.28 per share for the quarter. Analysts' estimates typically exclude special items. Third-quarter net income included a pre-tax charge for losses on auction rate securities of $1.8 million that reduced earnings by $0.07 per share.
Revenue for the third quarter declined to $108 million from $167.7 million in the third quarter of 2008. Analysts expected revenue of $109.98 million for the quarter. Gross profit declined to $28.63 million from $66.66 million while gross profit margin eased to 26.5% from 39.7% in the same period in 2008.
New orders for the third quarter were $100.5 million, compared to $119.4 million for the same period last year.
Income from operations for the quarter came down to $8.9 million from $32.21 million in the prior-year quarter.
For the nine-month period, the company reported a net loss of $5.6 million or $0.22 per share, compared to a net income of $83.81 million or $3.12 per share in the similar period last year. Third-quarter loss included charges for restructuring and impairment that had a negative impact of $0.51 per share. Revenue for the period slid to $303 million from $541.3 million in the year-earlier period.
Looking forward to fiscal 2009, the company trimmed its earnings guidance to $0.60 per share from $0.70 per share and adjusted its sales guidance to range from $410 to $415 million from the previous guidance range of $420 to $440 million.
Earnings guidance does not include the impact of the total restructuring and impairment pre-tax charges for all of 2009, which are estimated to be $0.55 per share, the company said. On a consensus, analysts estimate earnings of $0.65 per share on revenues of $419.04 million for fiscal 2009.
For fiscal 2010, the company estimates earnings to range from $0.60 to $1.05 per share and sales to range from $380 million to $430 million. Analysts, on a consensus, expect earnings of $1.08 per share on revenues of $420.53 million.
Commenting on the business scenario, the company said future defense opportunities include a new lighter weight generation of body armor, body armor for the company's allies, vehicle armor components for U.S. as well as European vehicle manufacturers, and potential new business for the recently-acquired military helmet operation. The company is also actively evaluating non-defense opportunities in China.
CRDN is losing $1.59 or 8.77%, and is trading at $16.55 on a volume of 558 thousand shares on the Nasdaq.
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