Wednesday, Ameron International Corp. (AMN), a manufacturer of engineered products, reported a sharp decline in profit for the first quarter, primarily due to decreased earnings from its 50%-owned steel mini-mill, TAMCO.
The Pasadena, California-based company reported a first-quarter net income of $3.8 million, or $0.42 per share, compared to $9.7 million or $1.07 per share in the first quarter of last year.
Two analysts polled by Thomson Reuters estimated the company to report $0.47 per share earnings for the quarter. Analysts' estimates typically exclude special items.
Quarterly sales declined to $146.0 million from $149.8 million in the year-ago quarter. Analysts had a consensus revenue estimate of $136.77 million for the quarter.
The company attributed the decline in earnings for the quarter, to a lower earnings from TAMCO, following significant decline in demand for steel rebar due to the reduction in construction spending in California, Arizona and Nevada.
TAMCO's sales for the recent quarter declined significantly and the business incurred a quarterly net loss of $5.2 million, compared to net income of $6.1 million last year. Ameron's share of TAMCO's net loss totaled $2.3 million after taxes in the first quarter of 2009, compared to $2.8 million profit reported a year ago.
The company stated that it does not expect the demand for steel rebar to recover in the short term, and expects TAMCO would start-up operations on a limited basis in the second quarter of 2009.
Meanwhile, the company's other units, the Fiberglass-Composite Pipe and Infrastructure Products Groups posted lower sales and earnings for the quarter, as a result of soft market conditions in Europe and Brazil and the timing of shipments from Asian operations. An improvement for the Infrastructure Products Group is not anticipated in 2009, the company said. The company projects the Fiberglass-Composite Pipe Group to continue to moderate during 2009.
The California-based company, which runs operations in North America, South America, Europe and Asia, said that its Water Transmission Group had higher sales and earnings for the quarter owing to increased wind tower shipments and improved plant efficiencies.
Looking ahead, the company anticipates that following the implementation of the government stimulus programs, it could see an improvement of activity as most of its businesses are well positioned to benefit from higher infrastructure spending.
AMN closed Tuesday's regular trading session at $47.35 a share on the NYSE. For the past 52-week period, shares of the company are trading in a range of $32.50 - $138.65.
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