The Eastern Company plummets on lackluster Q2 results
Shares of The Eastern Company (AMEX: EML) are tanking in mid-day trading after the manufacturer of industrial hardware, security and metal products reported a decline in second quarter results.
For the three months ended June 30, the Naugatuck, Conn.-based company recorded a 40% decrease in net income to $0.73 million, or $0.12 per diluted share, compared with net income of $1.2 million, or $0.21 per diluted share, for the second quarter of 2006.
Sales weakened 15% to $34.2 million, compared with $29.7 million for the second quarter last year.
Eastern said profit margins were negatively impacted by several factors. Most notably, the company said it grappled with offsetting increased costs of raw materials, energy and health care.
In its security products segment, Eastern reported that certain higher margin products were phased out by customers in favor of other products with lower margins.
The company also said the quarter reflects the amortization of intangible expenses related to its Royal Lock and Summit acquisitions, which the company completed in the latter part of 2006.
Shares of Eastern tumbled 19.6%, or $4.49, to $18.46 in mid-day trading Thursday.
