A.M Castle & Co. reports Q3 below estimates
A.M. Castle & Co. (NYSE: CAS) shares are dipping after the metals and plastics distributor reported its third-quarter sales jumped 16.5% to $350.3 million, below analyst estimates of $364 million and from $300.8 million a year earlier. The firm’s profit for the three months ended Sept. 30 fell to $12.9 million, or $0.57 per share, below Wall Street projections of $0.70 per share and compared with $15.5 million, or $0.82 per share, during the same period of 2006.
“We continue to experience softer demand across our business in general. This trend began during the second half of 2006 and it has continued through 2007 to date," CEO Mike Goldberg said in a statement. “Demand from our aerospace customers has also slowed, which we attribute to a build-up of inventory throughout the whole aerospace supply chain. Even in light of the current slowdown, we believe that our strategy to become the foremost provider of specialty metals and value-added services to targeted industries, including aerospace and energy, has us well-positioned for growth in the longer-term through the economic cycles.”
Goldberg warned that the firm’s fourth quarter is typically the company’s slowest, due to fewer effective shipping days.
“In addition, softer market conditions will likely continue through at least the end of the year,” the chief executive said. “Our focus will continue to be on managing inventory and margins for the balance of 2007 and remaining steadfast on the execution of our long-term strategy.”
The Franklin Park, Ill.-based company’s sales, general and administrative expense during the quarter rose to $34.9 million, from $26.8 million during the prior-year period.
In morning trading, CAS shares are down 10.44%, or $3.27, at $28.06. Over the last 52 weeks, shares have ranged from $22.72 to $38.10.
