Material Science Company Cookson Group Plc (CKSN.L) reported a 26% decline in third-quarter revenue, excluding the effects of foreign exchange rates. The company also said that it now expects trading profit for full year 2009 to be around the upper end of the forecast range of analysts.
For the third quarter, Group revenue dropped 26% on constant currency basis to GBP 498 million, and declined 18% at reported exchange rates from the previous year.
Cookson also noted that revenue grew 9% quarter-over-quarter on constant currency rates, reflecting progressive improvement in trends in the electronics end-markets since March and signs of recovery in steel production end-markets since May. As per the Interim Management Statement, trading profit improved significantly in the quarter reflecting the strong profit drop-through from the additional revenue and the incremental cost-reduction program savings.
Segment-wise, Ceramics recorded revenue of GBP 279 million, down 31% in the prior-year quarter. Revenue declined 24% at reported exchange rates. Revenue increased 7% quarter-on-quarter at constant exchange rates and 4% at reported exchange rates.
Revenue in Steel Flow Control product line declined 26% at constant exchange rates from the three-month period of last year, while for Linings revenue slid 28%.
Revenue in Steel Flow Control grew 17% from the second quarter at constant exchange rates. Linings revenue edged up 2%, as the product line was less impacted in the first half of 2009 by the depressed steel production.
Foundry revenue, which represents around one-third of the Ceramics division's revenue, dropped 37% from the third quarter of 2008. When compared to the second quarter of 2009, foundry revenue climbed 6%.
Electronic division's revenue came down 18% to GBP 145 million from 2008 third quarter, and declined 15% on reported exchange rates. Revenue grew 5% quarter-on-quarter at constant exchange rates, adjusted for the impact of differences in commodity metal prices and eliminating back-to-back customer equipment sales.
Cookson said that trading profit of Precious metals in the third quarter was well ahead of the equivalent quarter last year, due to high levels of reclaim activity in Europe. Trading profit improved from the second quarter on normal seasonality.
Considering the trading performance trends and the anticipated normal reduction in activity in December due to customer production shutdowns, the company sees trading profit for full year 2009 to be around the upper end of current analysts' forecasts range of GBP 78 million - GBP 110 million.
CKSN.L is currently trading at 440.00 pence, up 46.40 pence or 11.79%, on the LSE.
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