LOS ANGELES Precision Castparts Corp. ran into "significant headwinds" in the maintenance of three key forging presses, resulting in greater-than-anticipated downtime at its Texas and Massachusetts facilities during its fiscal second quarter.
The Portland, Ore.-based producer of investment castings, forgings and airframe products said that the problems involved the Houston and Grafton, Mass., operations of its Wyman-Gordon unit, where planned maintenance took longer than expected, as well as the main ring-rolling press its Carlton Forge Works unit in Paramount, Calif., which suffered a previously undisclosed electrical fire.
In its fiscal second quarter ended Sept. 30, PCC reported net income of $332.7 million on revenues of $1.9 billion, compared with income of $294.7 million on revenues of $1.8 billion in the year-ago period.
Chairman and chief executive officer Mark Donegan said during an earnings conference call that the press problems were as challenging as anything the company has encountered "in quite a while," including market downturns. He said that although the market was growing at the time the problems occurred, the company "did not have the key forged assets to respond" to this growth.
"Basically, we had to claw and fight our way through the process," Donegan said, noting the three presses involved are particularly critical to PCCs aerospace production, which accounted for 65 percent of the companys third-quarter business. The press outages resulted in a sales shortfall of $98 million to $100 million during the quarter, said Donegan, who stressed that PCC is "accelerating our forging throughput to compensate" for the downtime.
Donegan maintained that the problems didnt result in a permanent loss of market share. "We did not lose the order; we did not lose the business," he said.
In Houston, where a 29,000-ton press took seven and a half weeks to return to servicetwo and a half weeks longer than anticipatedcomponents that were expected to have a life of 20 years were instead found to have lasted only five years. PCC temporarily "de-rated" the press back to its original 25,000-ton rating and "offloaded" work that required the 29,000-ton press to the 35,000-ton press in Grafton, Donegan said.
Meanwhile, PCC has also changed the name of its former Fastener Products segment to Airframe Products. This reflects the parent companys increasing involvement in the aerostructures market, where a number of its recent acquisitions have taken place.