Precision Castparts Corp
) reported its fourth quarter fiscal 2012 earnings results,
reporting earnings per share from continuing operations of $2.31 a
share. Quarterly earnings were well above the Zacks Consensus
Estimate of $2.27 a share and were also up 23.5% year over
Profits were primarily driven by strong contracts in the end
markets and the company's aerostructures, oil and gas businesses
also performed well during the quarter.
Total revenue grew 16% year over year to $1.95 billion compared
to $1.37 billion in the prior-year quarter. Improved performance in
aerospace and increased sales in general industries benefited the
company's results in the quarter.
Revenue was up across all the reporting segments, with all the
three segments Investment Cast Products, Forged Products and
Fastener showing strong growth.
Investment Cast Products
revenue surged by 8.0% year over year to $602.7 million. During the
quarter, contractual material pass-through pricing accounted for
about $20 million of sales, versus approximately $18 million in the
prior year quarter.
The segment's aerospace revenue grew approximately 10%, driven
by higher build rates of commercial aircraft, including the 787 and
the greater frequency of takeoffs and landings. Industrial gas
turbine (IGT) sales grew approximately 16% year over year,
primarily due to high spares activity driven by positive OEM
However, the increases in aerospace and IGT sales were partially
offset by declines in general industrial and other sales.
revenue was up 11.0% to $858.1 million. Revenue growth was driven
by increased volume, while the average metal selling prices from
the segment's three primary mills increased sales by approximately
$15 million year over year.
The segment also reported robust aerospace activity, with fourth
quarter fiscal 2012 base aerospace sales improving 14% and total
aerospace sales increasing by about 30% over the prior year
The segment also reported gains in market share that increased
the segment's total IGT sales by more than 15% year over year. Oil
& gas sales continued to grow through the fourth quarter,
reporting approximately 40% increase year over year.
Again decline in general industrial sales was a drag on the
segment, as it used more of its assets to supply its component
manufacturing operations, with inter-company activity increasing by
about 30% over the comparable prior-year quarter.
revenue increased a robust 42% to $487.9 million. Base aerospace
sales grew 15% year over year, driven by encouraging pick-up in
orders for the segment's critical aerospace core fastener products
in the past two quarters of the fiscal year. Further, the
acquisition of Primus also pushed up the overall segment revenue.
Consolidated segment operating income grew 24% to $497.8 million
in the fourth quarter. This was about 25.5% of sales, compared to
consolidated segment operating income of $401.4 million or 24.0% of
sales in the comparable prior year quarter.
Exiting the quarter, Precision Castparts had cash balance of
$698.7 million with total debt of $208.2 million and total equity
of $8,364.8 million. Total capital expenditure incurred by the
company in the quarter amounted to $88.5 million.
With the improving aerospace and IGT sales and orders, the
company sees opportunities for further market penetration,
providing upside potential for the next quarter. The acquisitions
of Primus and RathGibson and the recently acquired Centra all are
expected the company to give the required boost in the very strong
aerospace market, given the ramp-up of the 787 program by
) and increase in the base production aerostructures build-rates
for both Boeing and Airbus.
Precision Castparts currently hold a Zacks Rank # 3 which
implies a short term 'Hold' on the stock.
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