NEW YORK Graphite electrode maker GrafTech International Ltd. has lowered its earnings guidance for 2013 by about 5 percent as a result of lower-than-expected global demand from steelmakers, the Parma, Ohio-based company said April 25 as it reported a sharp decline in first-quarter results.
The company, which produces graphite electrodes for use in electric-arc furnace steelmaking, said it expects full-year earnings before interest, taxes, depreciation and amortization (Ebitda) of between $165 million and $195 million, down from an earlier forecast of $175 million to $205 million.
GrafTechs lower earnings outlook comes on the heels of the World Steel Association revising downward its projection for global steel use growth to 2.9 percent from 3.2 percent previously (amm.com, April 11).
"Steel customer confidence remains low, given the slow start to the year in steel production," GrafTech said in an outlook accompanying its first-quarter earnings release. "As a result of the economic and steel data, we are reducing our targeted Ebitda range for 2013. ... Given the challenging operating environment, we are also reducing our targeted capital expenditures to $90 million to $110 million" vs. $90 million to $120 million previously.
GrafTech posted first-quarter net income of $4.21 million, down 76 percent from $17.53 million in the same period last year despite a 5.3-percent increase in sales to $253.73 million.