Materion Corporation (NYSE:MTRN) today provided an update on expected third quarter 2013 results and also commented on its outlook and initiatives to reduce costs and improve margins.
- Third quarter markets weaker and high-margin shipments delayed
- Fourth quarter expected to be the strongest of the year
- Cost reduction actions taken in the fourth quarter driving significant operating performance improvement beginning in 2014
THIRD QUARTER 2013 WEAKER THAN EXPECTED
The previously announced weaker business conditions being experienced at the beginning of the third quarter of 2013 did not improve during the third quarter to the level that the Company originally anticipated. Order entry has been highly variable, and business levels have been increasing at a slower than expected rate. In addition, shipments of certain high-margin beryllium-based defense and nuclear science as well as defense optics orders have been delayed. Profits were also adversely affected by lower manufacturing yields and efficiencies in the quarter. The impact of these factors has been offset, in part, by continued strong business levels in the medical, commercial aerospace, automotive electronics and commercial optics markets.
As a result of these factors, earnings for the third quarter are expected to be approximately $0.20 per share.FOURTH QUARTER TO BE THE STRONGEST OF THE YEAR The aforementioned delayed orders are expected to ship in the fourth quarter. In addition, production levels at the Company’s new beryllium pebble plant continued to increase throughout the third quarter and were at record levels in the month of September, well ahead of the fourth quarter target. As a result of these and other factors, the Company expects results for the fourth quarter to be well ahead of the third quarter and the strongest of the year, exceeding the $0.43 per share reported in the second quarter, absent the impact of the actions discussed below.