Metal alloys maker
Haynes International Inc.
) posted third-quarter fiscal 2013 (ended Jun 30, 2013) earnings
of 43 cents per share, edging past the Zacks Consensus Estimate
by a penny. Profit tumbled roughly 61% year over year to $5.3
million hurt by a double-digit fall in sales.
Revenues dipped 12.7% year over year to $123.6 million, hit by
weak market conditions, lower average selling prices and reduced
sales volume. Shorter mill lead times and lower nickel prices led
customers to delay order entry during the quarter, resulting in
lower backlog. Sales missed the Zacks Consensus Estimate of $126
Volume fell 3% year over year to 5.5 million pounds in the
reported quarter. Average selling price slipped 10% year over
year to $22.31 per pound in the quarter on account of reduced raw
material prices, unfavorable product mix, increased competition
and weak demand.
Haynes' consolidated backlog was $189.6 million at the end of
the quarter, down 8.4% sequentially, reflecting a 16% fall in
backlog pounds. The sequential reduction in the backlog stemmed
from lower order entry volumes and a change in mix of products in
the backlog. Destocking in the supply chain continues to cause
lower order entry volumes.
Gross margin fell to 15.1% from 22.9% a year ago, impacted by
lower value product mix and lower volume. Operating income slid
62% over the prior-year quarter to $8 million.
Haynes exited the quarter with cash and cash equivalents of
$43.6 million, down 15% year over year. Long-term debt declined
27% year over year to $0.98 million.
Moving ahead, Haynes expects net income for the fourth quarter
to be below the level achieved in the third due to lower order
entry volume and pricing. The company sees net income to continue
to be affected by weak volume and pricing as seen in the second
and third quarters. Haynes does not expect a recovery in the
fourth quarter given weak market visibility, uncertain economic
environment and level of booking to date.
Haynes is also delaying capital spending on non-strategic
projects given its current lower business volumes. It has cut its
capital expenditure guidance for fiscal 2013 to roughly $48
million from $70 million. Haynes spent roughly $10.9 million in
the reported quarter, taking its capital investment for the first
nine months to around $33.7 million. It anticipates capital
spending of roughly $50 million in fiscal 2014.
Founded in 1912, Haynes makes corrosion-resistant alloys for
aerospace, chemical processing, gas turbine and other industries.
It specializes in manufacturing nickel and cobalt-based alloys in
sheet, coil and plate forms.
Haynes retains a Zacks Rank #5 (Strong Sell).
Other companies in the metal fabrication industry having
favorable Zacks Rank are
Northwest Pipe Co.
). All of them hold a Zacks Rank #1 (Strong Buy).
HAYNES INTL INC (HAYN): Free Stock Analysis
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