Military demand for bulletproof ceramics drove higher third-quarter sales and profits at Costa Mesa-based Ceradyne Inc., but the company’s shares slumped Thursday after an analyst downgraded the stock.
The company, which makes armor for soldiers and vehicles as well as industrial ceramics, saw quarterly sales rise 67% from a year earlier to $94 million.
Net income rose 82% to $13 million.
Ceradyne, which struggled with profitability when defense orders first started picking up a couple of years ago, said its gross profit margin hit a record 37% in the quarter, up from 32% a year ago.
The results reflect higher production at the company’s Kentucky and Costa Mesa plants, Chief Executive Joel Moskowitz said.
In the quarter, Ceradyne said it booked $68 million in orders, up from $64 million a year ago. For the nine months through September, bookings were $243 million, up from $131.7 million a year earlier.
The company’s stock sank 16% on Thursday after Friedman Billings Ramsey cut its rating from “outperform” to “market perform.”
Ceradyne is “fairly valued,” the investment bank said, raising questions about future gains in the stock.
The company’s shares have more than doubled since the spring with a market value of nearly $900 million.
