NEW YORK Northwest Pipe Co. expects a challenging fourth quarter amid a low water transmission backlog and thin oil country tubular goods (OCTG) margins.
"Rising coil costs, stagnant pipe prices and still depressed demand continue to put pressure on OCTG margins," president and chief executive officer Scott Montross said during a third-quarter earnings conference call, adding that this represented a "perfect storm" for the segment.
In water transmission, bidding activity is healthy but few projects have been finalized and the market remains very competitive, he said.
He declined to elaborate on the companys announcement that it was looking at options for its OCTG business (amm.com, Oct. 1), but said no decision has been made.
The company reiterated its view that there has been little impact so far from the recently filed trade case on OCTG, but this is expected to change once the Commerce Department makes its preliminary decisions on the anti-dumping cases in mid-February.
The Vancouver, Wash.-based company recorded net income of $1.02 million during the quarter, down 70.1 percent from $3.4 million a year earlier.
Water transmission sales fell 26.2 percent to $46.8 million during the quarter. Meanwhile, tubular product sales jumped 8.9 percent to $56.2 million in the same comparison, driven by a 19.8-percent rise in tons sold that was partially offset by a 9-percent drop in average selling prices.
Northwest Pipes volumes were boosted by orders for the Double H project (amm.com, Nov. 4), which total about 36,000 tons, according to Montross. "Weve arrived at being able to make these kinds of projects now" due to upgrades at the companys Atchison, Kan., facility.