Ceradyne Second Quarter Sales Flat
Ceradyne Inc. recently reported financial results for the second quarter and six months ended June 30, 2012. Sales for the second quarter of 2012 were $130.6 million, compared with $145.4 million in the second quarter 2011. Net income for the period was $6.8 million, down from $19.1 million in the second quarter 2011.
Gross profit margin was 28.1% of net sales in the second quarter 2012, compared to 36.4% in the same period in 2011. Net income for the six months ended June 30, 2012 was $10.6 million, vs. $42.7 million in the prior year period.
“Although we are encouraged by the sequential increase in earnings from Q1’s $0.16 per share to Q2’s $0.28 per share, we continue to have short-term concerns regarding the anticipated solar rebound, its timing and the reduced gross profit margins we foresee,” said Joel P. Moskowitz, president, chairman and CEO. “In the second quarter alone, operating losses from our solar crucible business, which 12 months ago had the highest gross profit margin in the company, reduced our fully diluted earnings per share by $0.14.
“Without improved shipment levels in solar and defense, our second half 2012 operating results will likely be similar or somewhat greater than our first half 2012. Although the demand for photovoltaic solar energy, as measured by solar installations, increased 21% from 2010 to 2011 and is anticipated to have a more modest growth in 2012, our Chinese customers continue to have excess capacity and high levels of inventory, which have yet to be reduced to levels justified by demand. However, we continue to see increased solar use in China, the U.S., India and other Asian countries offset to some degree by reduced European demand. However, the macro outlook for the solar business is very positive, primarily due to reduced costs resulting in ‘grid parity,’ even with reduced or no government subsidies.
“Our strategy will be to reduce costs, primarily through technology and automation, and to continue certain discussions with our Chinese customers to result in closer, long-term relationships.”
For additional information, visit www.ceradyne.com.