NEW YORK High levels of imports continue to weigh down Northwest Pipe Co.s tubular segments financial performance, and that pressure is likely to persist in the months ahead, the Vancouver, Wash.-based pipe and tube maker said in reporting its first-quarter results.
"As expected, tubular products net sales and margins were significantly lower compared to the first quarter of 2012 as we experience continued high levels of imports and a falling rig count. In the second quarter of 2013 ... we expect to see gross profit levels (in the tubular products division) that are near breakeven as high levels of imports continue to negatively impact segment earnings for the near term," Scott Montross, president and chief executive officer, said in a statement.
The companys tubular products unit saw first-quarter operating earnings plunge 89.3 percent to $666,000 from nearly $6.2 million a year earlier as sales slid 26 percent to $61.98 million from $83.74 million, driven by a 19.1-percent slump in volume sold to 53,900 tons from 66,600 tons and a 9-percent drop in average selling prices.
But Northwest Pipes water transmission business more than offset the tubular segments decline. Water transmission operating earnings more than doubled to $18.03 million from $8.02 million a year ago as sales jumped 34.5 percent to $78.61 million from $58.43 million in the same comparison due to a 53-percent increase in tons produced even as average selling prices dropped 12 percent.
The company posted net income of nearly $9.51 million, more than double $4.73 million in the first three months of last year, on sales that fell 1.1 percent to $140.6 million.