Ceradyne Shares Dip on Q2 ReportTuesday, July 24, 2012
Costa Mesa-based Ceradyne Inc. shares dropped 8% in morning trading on news of its second-quarter earnings.
Ceradyne makes body armor for military applications, industrial components, crucibles for solar panels, and other ceramic-based products for commercial markets.
The company saw $130.6 million in sales for the second quarter, a 10% drop from a year-earlier period. It posted a 56% drop in operating income in the latest quarter, to $12.9 million.
It attributed the overall sales decline in part to “very weak” shipments of ceramic crucibles to the solar industry.
The company said it received $79.4 million worth of new orders in the second quarter, compared with $108.8 million in the year-ago period.
It had backlog of $208.8 million at the end of June, compared with $230.8 million a year earlier.
Ceradyne saw its sales rise consistently between 2002 and 2007 on demand of its body armor for soldiers during the height of military conflicts in the Middle East. Sales began declining in 2009, as orders for body armor fell amid the general economic downturn.
No new orders were made for ceramic body armors in the second quarter, and the company now is in process of resuming work on a $6.9 million order for ceramic body armor plates from the U.S. Special Operations Command. The order has been delayed as Ceradyne works “on a response that addresses [the organization’s] concern,” about the product, the company said.
“This situation will cause a further delay in shipping these orders, which total $17 million,” Ceradyne said. “However, we believe that we will be able to resolve this matter and resume shipments of these orders during the fourth quarter of 2012.”