PRECISION CASTPARTS CORP Earnings: Profits Grow by Double Digits For Fifth Straight Quarter

S&P 500 (NYSE:SPY) component PRECISION CASTPARTS CORP (NYSE:PCP) reported its results for the third quarter. Precision Castparts manufactures complex metal components and products and provides investment castings, forgings, and fastener systems for aerospace and industrial gas turbine applications.

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PRECISION CASTPARTS Earnings Cheat Sheet for the Third Quarter

Results: Net income for the metal fabrication company rose to $307.3 million ($2.11 per share) vs. $256.5 million ($1.78 per share) in the same quarter a year earlier. This marks a rise of 19.8% from the year earlier quarter.

Revenue: Rose 14.2% to $1.82 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: PCP reported adjusted net income of $2.12 per share. By that measure, the company fell short of mean estimate of $2.21 per share. It fell short of the average revenue estimate of $1.91 billion.

Quoting Management: “Our third quarter results solidly demonstrate the level of performance we can achieve at current order rates and provide a clear line of sight to what’s possible in the future,” said Mark Donegan, chairman and chief executive officer of Precision Castparts Corp. “Moving forward, the issue is strictly one of timing. The contracts are in place. The capacity is in place. As the orders pick up, and we move the product through our factories, our results will improve even further. We have plenty of opportunity for improvement in all of our operations, with significant upside as we leverage the upcoming acceleration in sales.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 16.2%, with the biggest boost coming in the second quarter when revenue rose 18.7% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 17.4% and in the first quarter, the figure rose 21.7%.

The company has now fallen short of estimates in the last two quarters. In the second quarter, it missed expectations by 2 cents with net income of $2.03 versus a mean estimate of net income of $2.05 per share.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the fourth quarter is $2.39 per share, down from $2.45 ninety days ago. For the fiscal year, the average estimate has moved up from $8.50 a share to $8.59 over the last sixty days.

Competitors to Watch: MS International plc (NYSE:MSI), Ladish Co., Inc. (NASDAQ:LDSH), Alcoa Inc. (NYSE:AA), Haynes International, Inc. (NASDAQ:HAYN), Allegheny Tech. Inc. (NYSE:ATI), Chicago Rivet & Machine Co. (AMEX:CVR), United Technologies Corp. (NYSE:UTX).

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com