Earnings Preview: Precision Castparts Corp. (NYSE: PCP) Second Quarter 2011
Thursday, October 07, 2021 1:53 PM

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Precision Castparts Corp. (NYSE: PCP) is scheduled to release its fiscal second-quarter earnings before the opening bell on Thursday, October 21, 2010. Analysts, on average, expect the company to report earnings of $1.68 per share on revenue of $1.46 billion. In the year ago period, the company reported earnings of $1.54 per share on revenue of $1.31 billion.

Precision Castparts Corp. manufactures metal components and products primarily in the United States and the United Kingdom.  The company is a market leader in manufacturing large, complex structural investment castings and is a leading manufacturer of airfoil castings used in jet aircraft engines. In addition, the company has expanded into the industrial gas turbine, fluid management, industrial metalworking tools and machines and other metal products markets. The company operates in three segments: Investment Cast Products, Forged Products, and Fastener Products. The company counts General Electric, Boeing, Airbus, United Technologies, Pratt & Whitney and Rolls Royce among its customers.

In the preceding fiscal first-quarter, the Portland, Oregon-based company's net income was $235.0 million, or $1.64 per share, compared to $240.4 million, or $1.70 per share, in the year-ago quarter. Revenue grew 5.6% to $1.45 billion from $1.37 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of $1.69 per share on revenue of $1.45 billion. At the end of the first quarter of fiscal 2011, the company had $286.4 million of cash with debt balance of $251.0 million.

The company is poised to benefit from a recovery in commercial aerospace. The company anticipates a strong second half of fiscal 2011. Operations across all of its segments have established new cost structures that are poised to achieve solid results as the anticipated volume begins to return in the second half of fiscal 2011. In a conference call with analysts in late July, Chief Executive Mark Donegan said that he expects sales in the company's core aircraft fastener sector to increase in the third and fourth quarters of the year, particularly as production on the Boeing 787 Dreamliner ramps up. Donegan noted that the fasteners for the 787 project would be a major catalyst for accelerated growth.

 They're worth about $2.7 million a plane for the company. He also said that orders are kicking back in for seamless pipe in China and that the company expects improvement to show up in its results over the next few quarters. Also, the company's Forged Products segment will benefit from ongoing transition to larger, super-critical boilers in China. The company is also trying to gain better control of volatile metal costs by working more closely with its customers on raw material purchases. However, the second quarter results will be impacted by typical seasonal events of scheduled forge shutdowns for maintenance and extended holidays in its European operations.

In terms of stock performance Precision Castparts shares have gained nearly 13 percent since the beginning of the year.

Disclosure: Author doesn't own any of the stocks discussed here.

 

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