Haynes International Earnings: Here’s Why Investors are Excited Now

Haynes International Inc. (NASDAQ:HAYN) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 1.38%.

Haynes International Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 61.26% to $0.43 in the quarter versus EPS of $1.11 in the year-earlier quarter.

Revenue: Decreased 12.7% to $123.59 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Haynes International Inc. reported adjusted EPS income of $0.43 per share. By that measure, the company missed the mean analyst estimate of $0.44. It missed the average revenue estimate of $128.8 million.

Quoting Management: “Market conditions continued to soften during the third quarter, leading to lower revenues, fewer pounds sold and reduced pricing compared to the second quarter of 2013. We believe that customers are continuing the process of inventory de-stocking in the supply chain. Shorter mill lead times and reductions in nickel prices served to encourage customers to delay order entry. As a result, backlog has declined and transactional service center business is increasingly competing with mill-direct orders, leading to lower profitability,” said Mark Comerford, President and Chief Executive Officer. “We do not anticipate a near-term pick-up in demand, and thus expect that net income for the fourth quarter of 2013 will be lower than net income in the third quarter of 2013. Currently, we are adjusting to the lower volume levels by managing production schedules, reducing spending and deferring non-strategic capital projects. Our key capital projects are progressing well with completion of those expansion projects expected by the end of fiscal 2014 which we believe will position us well for the expected long-term growth in our key markets.”

Key Stats (on next page)…

Revenue decreased 4.34% from $129.2 million in the previous quarter. EPS decreased 17.31% from $0.52 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.72 to a profit $0.56. For the current year, the average estimate has moved down from a profit of $2.33 to a profit of $1.93 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)