Costa Mesa-based body armor maker Ceradyne Inc. reported second-quarter profits ahead of Wall Street estimates and refined its outlook for the rest of the year based on better forecasting of Pentagon contracts.
The stock was up about 10% in midday New York trading, giving it a market value of $1.1 billion.
The company posted a second-quarter net profit of $33.2 million, compared to $38.3 million a year ago. That still beat Wall Street expectations of $30 million.
Revenue came in at $185 million, down slightly from a $185.4 million a year ago.
Analysts were expecting $179.7 million.
Ceradyne’s specially designed ceramic material is used for body armor for troops serving in Iraq and Afghanistan, as well as by dental and solar panel industries.
For the rest of the year, the company expects sales of $740 million to $750 million, compared to a February forecast of $715 million to $836 million.
For profits, Ceradyne said it sees $124.6 million to $127 million, up from an earlier view of $120 million to $134 million.
Ceradyne expects its next big order for its vests to come in the third-quarter, with delivery in the fourth-quarter.
It had hoped to win a contract for an armored vehicle it’s developing with Wisconsin’s Oshkosh Corp., but lowered its forecast as the Pentagon focuses on contracts for smaller vehicles.
The company has been trying to branch out with other products to pick up slack from its armor vests that are off their order peak from a year ago. Military orders make up about 60% of its sales.
It’s acquired patents to use its ceramics for oil drilling and bought North Billerica, Mass.-based SemEquip, Inc., a semiconductor equipment company that uses its chemicals to make memory chips.
It also signed agreements to buy another 14 acres of land in China to expand its business of providing material for the solar industry.
Earlier in the month, an analyst at the Arlington, Va.-based brokerage Friedman Billings Ramsey upgraded the company, saying he expected about $2 billion to flow into the company through the government’s fiscal year.
He said the armor vests would be a big part of that number as the company maintains a 60% share of the market that the Pentagon has made a separate line item for on their 2010 budget.
