Fastener Sales Strong for PCC

Jason Sandefur

The acquisition of SPS Technologies earlier this year helped push Precision Castparts Corp. sales up 69% to $697.5 million during the second quarter of fiscal 2005. Overall net income from continuing operations more than doubled to $57.2 million.
Fastener Products sales during the quarter $165.1 million, with operating income of $21.4 million. PCC said the fastener segment saw dramatic improvement in operating margins quarter over quarter, increasing from mid-single digits to 13 %. Aerospace aftermarket sales remain strong, offsetting lower automotive sales as a result of shutdowns at the Big Three automakers during their transition to the new 2005 models.
“While SPS continues to outperform the company’s original estimates since being acquired & the year-over-year decrease in margin percentage principally reflects the earnings impact of the lower-margin SPS businesses being included in the current quarter, coupled with increased raw material costs at the company’s casting and forging operations,” PCC said in a written statement. For the first six months of fiscal 2005, fastener sales were $329.2 million, while operating profit equaled $38 million.
PCC’s decision to most of its Fluid Management Products segment resulted in a charge of $245 million. The charge contributed to a quarterly net loss of $183 million, compared with net income of $14.5 million in the second quarter of fiscal 2004. PCC CEO Mark Donegan said the divestiture helped position the company””for continued expansion of our critical fastener capabilities.””
Overall sales for the first six months of fiscal 2005 jumped 65.3% to $1.36 billion, with a net loss of $129.4 million, compared with net income of $48.8 million during the first half of fiscal 2004. Web: Mprecast.com �2004 FastenerNews.com