8/10/2010
HEADLINES
STOCKS: Precision Castparts Fastener Segment Diversifies To Offset Reduced OEM Inventories
Boeing 787 Dreamliner
Precision Castparts Corp. reported Fastener Product sales dipped 4.7% to $328.9 million, or 31.7% of sales, in the opening quarter of fiscal 2011, with segment operating income down 9.8% to $104.2 million.
“Sequentially, the (fastener) segment held sales relatively flat by expanding its non-core product lines to offset significant declines in its core products, as aerospace OEM and distributors reduced inventory levels to meet their requirements,” the company stated.
Portland-based PCC expects its core fastener product lines to start recovering by the third quarter of fiscal 2011 “with sales accelerating on top of its expanded product portfolio.”
“In the second half, orders are beginning to more closely align with aircraft delivery schedules, aerospace distributors should be restocking inventories, and the 787, a program that presents the segment with significant upside performance opportunity, will serve as a major growth catalyst.”
Overall PCC sales increased 5.6% to $1.45 billion during fiscal Q1, driven by commercial aerospace OEM growth of approximately 15% and general industrial growth of approximately 50%. Consolidated operating income slipped 5% to $351.9 million, or 24.3% of sales, while net income declined 1.9% to $236.1 million.
“As we anticipated, aerospace fastener distributor sales and schedules from European IGT customers were flat sequentially,” CEO Mark Donegan noted.
“(But) we saw very positive signs of recovery in some of our core markets during the quarter,” he continued. “Commercial aerospace OEM schedules on the base programs are beginning to recover, and the 787 program will provide a catalyst for accelerated growth as we enter the second half of the year.”
Each Boeing 787 Dreamliner contains $5.6 million of PCC fasteners and other components.
“Aerospace fastener distributor orders are also expected to make a second-half recovery.”
PCC fastener sales for fiscal 2010 dropped 12% to $1.4 billion, while segment operating income declined 4.3% to $439.3 million. ©2010 GlobalFastenerNews.com
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