Materion Corporation (NYSE:MTRN) today revised its earnings estimates for the full year 2011. While the Company, at this time, expects a profitable fourth quarter, the final results for the full year will likely be well below the low end of its previously announced range of $2.10 to $2.20 per share. The reduction is due to significantly lower than expected sales in the fourth quarter, higher than anticipated costs in the Company’s Beryllium and Composites Segment and an inventory valuation adjustment.
In the fourth quarter of 2011, the Company did not experience the increase in sales normally associated with the consumer electronics holiday period. Instead, the Company believes that its customers were driving inventories down to very low levels, which, in turn, resulted in sales for the quarter being well below what the Company expected.
It is now anticipated that 2011 sales, when reported, will be approximately $1.525 billion, or $35.0 million to $55.0 million below the Company’s previous range of $1.56 billion to $1.58 billion. Approximately $25.0 million of the reduction is related to pass through metal price declines, while the balance of $10.0 million to $30.0 million is due to the decline in sales volume.
As previously reported, the start-up and ramp-up of the Company’s new beryllium pebble plant has been slower than expected. The Company is pleased to report that the most significant issues that had delayed the start-up and ramp-up have been resolved. It is anticipated that the beryllium pebble plant production ramp-up will continue to progress and the Company currently expects to reach capacity levels in excess of the 2012 demand levels. The Company did, however, incur higher than expected costs in the Beryllium and Composites Segment during the fourth quarter and lower yields and other manufacturing issues unrelated to the start-up and ramp-up of the new plant.