Costa Mesa-based Ceradyne Inc., a maker of military and industrial ceramics, reported lower a third-quarter profit Tuesday and cut its outlook for the rest of the year and 2009.
Shares of Ceradyne closed down about 26% on a market value of $480 million.
Ceradyne, which makes bulletproof vests for soldiers in Iraq and Afghanistan, saw a third-quarter profit of $19.4 million, down 41% from a year earlier.
A onetime acquisition charge and fewer deliveries of body armor drove down Ceradyne’s profit.
Excluding charges, Ceradyne reported a profit of $27.6 million, which fell short of the $30 million analysts expected on average.
The company cut its projection for 2008 profits from $112.6 million to $127 million to $106 million $110 million.
Wall Street on average had been expecting a profit of $120.5 million.
Next year, Ceradyne said it could see a profit of $79.5 million to $86 million, well below the $118 million analysts had been expecting.
Part of the revision was driven by a delay in Ceradyne’s largest contract win to date.
Earlier this month, the company won a contract to supply $2.4 billion worth of armor to the Army.
Now Ceradyne said it has stopped work on the contract pending a protest by defense contractor BAE Systems PLC of Britain.
Ceradyne said it expects the issue to be resolved soon but not before causing a cut in deliveries this year and next.
The company also said it sees uncertainties over future Pentagon contracts.
