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Precision Castparts Management Discusses Q1 2013 Results - Earnings Call Transcript

We saw operating income increase by almost 23%, going from roughly $419 million last year to $515 million this year. We saw operating margins expand from 25% last year to 26.2% this year, and we saw EPS increase from $1.97 last year to $2.35 this year.

If I look at the key drivers on sales versus last year, certainly, as you'd expect, we had strong aerospace growth of roughly 30%, with 12% coming organically, driven by a 10% increase in OEM and a 25% increase in spares. IGT was also a very strong contributor for us, growing by roughly 15%, but the majority of that coming organically at 13%, and the primary drivers is spares, but we did see growth to a lesser degree on the OEM side.

And even though at a smaller base, an area that we want to diversify into, we saw oil and gas sales increase by 35% versus last year, with 15% coming organically. And as we've talked the last couple of quarters, we had lower general industrial sales of 3% versus last year. And again, the significant component in this is coming from the value of the revert nickel that we got last year versus this year. And then you'll see, when we get in the cast, we also had alloy sales going into general industrial, were down versus last year. And all this was partially offset by the acquisitions.

Contractual material pass-through was basically flat, and the selling price from our 3 primary mills was down roughly $10 million. And quick update, I'm sure you've seen in the press release that we had a 29,000-ton unplanned outage in Wyman-Gordon. The outage impacted roughly 3 weeks in Q1. You're going to see, it goes into 5 weeks into Q2. We had all the spares needed to complete the repair. And then repairs are going as planned at this point in time, but it was certainly an unplanned outage in the quarter.

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