NEW YORK Universal Stainless & Alloy Products Inc. expects operating earnings and net income to be at "breakeven level" in the first quarter on sales of approximately $49 million.
"While our first-quarter sales increased 4 percent on 8-percent-higher shipment volume compared with the 2012 fourth quarter, production activity levels remain well below normal, reducing our margins," Universal chairman, president and chief executive officer Dennis Oates said in a statement. "In addition, our operating costs now reflect increased depreciation expense related to our North Jackson, Ohio, facility, with equipment commissioning there now being essentially complete."
The company expects "meaningful market demand" to return gradually as the year progresses. "In the meantime, we are beginning to receive customer approvals for our VIM-melted products, which is an essential step to realizing the substantial potential of North Jackson and to shift the mix of our sales toward higher-margin premium alloys," Oates said.
The Bridgeville, Pa.-based company is scheduled to report its first-quarter results May 1.
Universals sales declined 24.2 percent and its net income dropped 74.6 percent in the fourth quarter of 2012 (amm.com, Jan. 29).