Ceradyne Inc. recently reported financial results for the first quarter ended March 31. Sales for the first quarter of 2012 were $106.3 million, compared with $150.1 million in the first quarter 2011. Net income for the first quarter 2012 decreased to $3.8 million, compared to a net income of $23.6 million in the previous year’s first quarter. New orders for the three months ended March 31, 2012, were $80.8 million, compared to $231.7 million for the same period last year.
“Ceradyne’s practice is not to provide quarterly guidance but to provide its best outlook for full-year performance,” said Joel P. Moskowitz, president, CEO and chairman of the board. “Although we had previously stated an expected soft first quarter, we are disappointed with the above reported results. The unusually sharp decline in solar photovoltaic crucible shipments to levels less than 20% of Q1 2011 was a substantial reason for the Q1 2012 results. This decline flies in the face of increasing global solar installation demand from 2010’s 22 gigawatts to 2011’s estimated 26.7 gigawatts. We believe the problem is the significant overcapacity and excessive inventory build by our customers, the Chinese solar module manufacturers. As our customers ‘work off’ their inventory of silicon wafers and require our ceramic crucibles for new silicon ingot melting, we anticipate very gradual improvement of this market later in 2012.
“Furthermore, the final government approval (after successful first article testing) for shipping our large ESAPI body armor sustainment award was not received until very late in March, pushing scheduled ESAPI shipments into Q2. We believe our financial performance will improve for the balance of 2012 beginning in Q2.”
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