Metal components maker Precision Castparts Corp. (PCP) Thursday posted a decline in third-quarter profit, impacted by lower sales across all its business segments.
The Portland, Oregon-based company's third-quarter net income attributable to shareholders was $232.9 million or $1.64 per share, compared to $239.1 million or $1.70 per share in the prior-year quarter.
Net income from continuing operations for the quarter totaled $228.7 million or $1.61 per share, compared to $236.5 million or $1.68 per share in the same quarter of last year.
On average, 17 analysts polled by Thomson Reuters expected the company to post earnings of $1.64 per share. Analysts' estimates typically exclude special items.
Quarterly net sales dropped to $1.37 billion from the previous year's sales of $1.61 billion, and fell shy of the $1.38 billion revenue consensus estimate of fourteen Street analysts.
The company's Investment Cast Products sales totaled $454.7 million, a decline from the prior-year's sales of $537.5 million, while segment operating income rose to $137.5 million from $135.3 million last year.
Total sales for the Forged Products segment declined to $587.0 million from $702.8 million reported in the same quarter of last year, negatively impacted by about $57 million due to lower contractual material pass-through pricing and lower selling prices of external alloy sales from the segment's three primary mills. These results also reflect nearly a full quarter of Carlton Forge, which, was impacted by planned preventative maintenance on its major presses. The segment's operating income totaled $136.4 million, a decline from $154.8 million reported in the third quarter of fiscal 2009.
Fastener Products sales totaled $331.1 million for the third-quarter of fiscal 2010, compared to sales of $370.4 million a year ago, largely due to significant decline in orders in its large distributor base, tempered by share gains. The segment's operating income was $105.6 million, down from $109.4 million reported in the corresponding quarter of last year.
Mark Donegan, chairman and chief executive officer of Precision Castparts Corp., said, "Our large structural casting businesses served as the leading indicator of the past year's aerospace destocking activity, and now their OEM orders are beginning to creep back slowly. However, aftermarket orders are getting absolutely no traction, limiting upside opportunity at a number of our casting and forging operations, and the fastener distributor base continues to work through the inventory it has on hand. "
For the nine-month period, the company reported net income attributable to shareholders of $680.6 million or $4.80 per share, compared to $784.2 million or $5.57 per share in the year-ago period.
Income from continuing operations decreased to $686.4 million or $4.84 per share from $773.5 million or $5.49 per share in the previous year.
Year-to-date net sales for the period ended December 27, 2009 were $4.05 billion, down from $5.21 billion reported a year earlier.
The company noted that the current upward trend in flight hours is encouraging going forward, but the company "really don't expect any meaningful recovery on the aftermarket or distributor front until into the second quarter of fiscal 2011."
PCP, which has been trading between $47.71 and $118.62 in the past 52 weeks period, closed Wednesday's trading session at $113.30.
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