NEW YORK Haynes International Inc. posted lower-than-anticipated earnings for its fiscal first quarter and the steel alloy manufacturer expects lower volumes and weaker pricing will continue to impact the company in the current quarter.
The Kokomo, Ind.-based company posted net income of $5.84 million for the three months ended Dec. 31, down 30.9 percent from $8.44 million in the same period a year earlier, on sales that fell 11.3 percent to $114.3 million. Sales volumes declined 8.7 percent to 4.7 million pounds from 5.1 million pounds in the same comparison, while the aggregate average selling price slipped 2.8 percent to $24.40 per pound from $25.11 per pound.
"The average selling price decreased due to lower raw material prices and increased competition, especially in the commodity alloys, while volume decreased due to declining customer demand during uncertain economic conditions," the company said. "Although a decline was anticipated in each of these categories from the fourth quarter of fiscal 2012, each category declined more than anticipated."
"(Fiscal) first-quarter results were negatively impacted by lower demand as customers exercised increased caution in making purchases, which we attribute to ongoing uncertain economic conditions. Customers continued to manage their inventories aggressively, and as a result our transactional business slowed significantly," Haynes president and chief executive officer Mark Comerford said in a statement.
"Business conditions in January are still soft, similar to the (fiscal) first quarter," he said. "However, looking beyond these near-term headwinds, commercial aircraft manufacturers and engine manufacturers continue to report strong conditions and excellent long-term growth projections. We also expect our land-based gas turbine and chemical processing markets to gain strength when global economic concerns abate. We continue to focus on the implementation of our capital spending projects in line with our plans to meet the expected long-term growth requirements of those target markets."
Comerford said he expects market conditions to "rebound as the year progresses," adding that customers have told him that "theyre expecting a pickup in late spring or early summer."
However, the company said that earnings in the fiscal second quarter are expected to continue to be unfavorably impacted by lower volumes and weaker pricing, and "management expects net income for fiscal 2013 to be below net income of fiscal 2012."