Shares of Costa Mesa’s Ceradyne Inc. rose last week after the company reported first-quarter results that beat Wall Street expectations and raised its guidance for the rest of the year.
Ceradyne, a maker of bulletproof vests and other products, saw shares rise as much as 10% for a time last week before settling on a gain of about half that.
Costa Mesa
Business: maker of defense, industrial products
Market value: $1.2 billion
2010 revenue: $403 million, up 1%
2010 profit: $29 million, up 244%
The company, which makes ceramics used in body armor, truck parts, dental products and other applications, has a market value of nearly $1.2 billion.
Ceradyne reported first-quarter sales of $150 million, up 36% from a year earlier.
That topped the $139 million in revenue Wall Street analysts were expecting on average.
Profits came in at $23.6 million, up from $5 million a year earlier.
Wall Street was looking for a profit of $16.2 million.
The strong quarter, new orders and a large backlog of contracts led Ceradyne to boost its 2011 profit guidance to $77 million to $87 million.
In March, Ceradyne forecast profits of $58 million to $67 million.
Yearly sales are seen coming in at $570 million to $600 million, up from March’s forecast of $505 million to $560 million.
“We are extremely pleased with Ceradyne’s first-quarter performance,” Ceradyne Chief Executive Joel Moskowitz said. “Almost all areas reflected an excellent start to 2011. These results and a cautiously optimistic outlook for the balance of 2011 are the basis for increasing our 2011 guidance.”
New orders for the first quarter hit $231.7 million, up 119% from a year earlier. Total backlog orders were $267.4 million, up 104%.
Gross profit margin was 38.7% of sales in the quarter, up from 23.1% a year earlier.
Diversifying
Ceradyne has been working on a long-running diversification strategy after seeing a boom in sales of its military armor during the peak of fighting in Iraq and Afghanistan.
Body armor sales for soldiers and vehicles now are about 40% of Ceradyne’s sales, down from nearly 70% a few years ago.
Ceradyne’s goal is to reach $1 billion in sales by 2016. That’s more than double the $400 million in revenue the company saw last year.
The company is looking to subsidiaries and emerging businesses for growth.
Products for the solar industry are a big push. Ceradyne makes ceramic crucibles used to hold melted silicon for solar panels as well as solar glass.
Solar industry sales are a growing part of Ceradyne’s business, accounting for about 15% of yearly sales. In 2011, they’re expected to make up 25% to 30%, or some $125 million.
Seven years ago, Ceradyne didn’t have a solar division. Now it’s seen as the company’s largest growth market.
In January, Ceradyne bought Seattle’s Viox Corp., which makes specialty glass used in solar panels, electronics and other uses, for $27 million in cash plus another $22 million if certain goals are met in the next two and a half years.
Solar glass products, a cousin of Ceradyne’s heavy-duty ceramics, make up about 70% of Viox’s $22 million in yearly sales. n
