Forged Products' year-over-year sales improved by 25 percent, climbing to $1.07 billion in the first quarter compared to last year's sales of $853 million. First quarter results included a full quarter of revenues from TIMET, Texas Honing, and Dickson/Aerocraft, compared to only a partial quarter of Dickson/Aerocraft in fiscal 2013. The segment's operating income grew by 37 percent, increasing to $267 million, or 25.1 percent of sales, in the first quarter, from $195 million, or 22.9 percent of sales, a year ago. Lower market-driven pricing of raw material inputs, which comprise approximately 55-60 percent of Forged Products' cost of goods sold, had a significant negative impact on the segment's year-over-year sales. Selling prices of alloy at the segment's three primary nickel conversion mills decreased by approximately $33 million year over year, the falling price of revert and other alloys negatively impacted sales by an additional $21 million, and contractual pass-through pricing declined by approximately $4 million from the same period last year. Like Investment Cast Products, the segment supported commercial aircraft production at levels consistent with aircraft build rates and will benefit from similar upside opportunities as commercial OEMs ramp production, and new aircraft and engine development programs progress. On the power side of the business, both downhole casing and interconnect pipe shipments grew year over year. Contributing to Forged Products' earnings in the quarter was strong performance from TIMET, where operational improvements are being implemented at an accelerated rate, as well as leverage throughout its aerospace manufacturing operations, and performance improvements from the seamless pipe businesses.
First quarter sales in the Airframe Products segment increased by 39 percent year over year, moving to $686 million this year from sales of $493 million a year ago. Sales included a full quarter of Centra, Klune, Progressive, Synchronous, and several small acquisitions, compared to only a partial quarter of Centra in fiscal 2013. Operating income grew 40 percent to $205 million, or 29.9 percent of sales, compared to $146 million, or 29.6 percent of sales, in the same period last year, despite the inclusion of several lower-margin acquisitions. Critical aerospace fasteners sales improved by approximately 12 percent year over year, although shipments of these fasteners have still not fully caught up to aircraft production rates. This situation applies most notably to the Boeing 787 program, where the segment's fastener plants are supplying at an average pace of approximately five shipsets per month. The base aerostructures business, which grew year-over-year aerospace sales by 5 percent, is more closely tracking current commercial OEM build rates and will accelerate in line with further ramp-ups in aircraft schedules. Airframe Products' operating income was driven by rapid integration of the acquisitions completed over the last two years, effective cost management, and strong leverage of its increased workload. The pending acquisition of Permaswage establishes a firm foothold in the fittings market and will be immediately accretive to earnings.
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