Defense supplier Ceradyne Inc. warned last week that its first-quarter sales would be about 22% lower than a prior forecast because of delays in shipping armor to the military.
Sales in the quarter now are expected to be about $69 million, up from $37 million a year earlier.
Costa Mesa-based Ceradyne said the government changed its requirements on the company’s small arms protective insert armor, which caused the delay.
The company, which makes ceramic-based armor, had to get the new design approved, retool the new armor plate and bring its Lexington, Ky., plant up to speed.
The delay cost the company about $19 million in quarterly sales, Ceradyne said.
“Ceradyne expects that this shipment delay will be made up in 2005,” said Chief Executive Joel Moskowitz. “Ceradyne has now had two of its new designs approved and has shipped about 15,000 units of this new design late in March through today.”
Shares of Ceradyne, which still expects to meet its previous 2005 shipment guidance, were down 6.5% to $20 on the news last week. The company’s full quarterly earnings report is due April 28.
The company has seen its shares quintuple in the past three years, in large part from a surge in military orders for the company’s armor amid the U.S. actions in Afghanistan and Iraq.
But shares are down about 40% this year as investors worried that the company might have trouble keeping up with its fast growth and absorbing its acquisition of Germany’s ESK Ceramics.
,Mike Mason
