Precision Castparts Earnings: Double-Digit Revenue Growth

Precision Castparts Corp. (NYSE:PCP) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. However, both net income and revenue climbed year-over-year. Shares are up 2.28%.

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Precision Castparts Corp. Earnings Cheat Sheet

Results: Net income increased 9.99% to $338 million ($2.32 per diluted share) in the quarter versus a net gain of $307.3 million in the year-earlier quarter.

Revenue: Rose 10.08% to $2 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Precision Castparts Corp. reported adjusted net income of $2.32 per share. By that measure, the company missed the mean analyst estimate of $2.48. It missed the average revenue estimate of $2.11 billion.

Quoting Management: “In addition to all the upside potential in our current operations, the acquisition of Timet will be a significant needle mover, a true accelerator for Precision Castparts on many different fronts,”┬ásaid Mark Donegan, Chairman and CEO of Precision Castparts Corp…

…We successfully faced the challenge of getting approval from three independent regulatory agencies and closed the transaction only six weeks after the announcement of the acquisition. Now we are moving out on all fronts to extract value from Timet’s worldwide operations. To begin with, we have multiple opportunities to improve existing Timet manufacturing operations, applying our manufacturing disciplines, driving out costs, and positioning those operations for improved sales. On top of that, the synergies of our two companies are remarkable: better vertical integration, increased revert availability and utilization, higher volumes across our forging assets, and additional market penetration, among others. At this point, we believe synergies of $80-100 million are well within reach over the first 24 to 36 months. The integration has already begun in full force, and the plans for future value creation are actively being rolled out throughout all of our manufacturing operations.”

Key Stats:

Revenue increased 3.6% from $1.93 billion in the previous quarter. Net income increased 1.59% from $332.7 million in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $2.79 to a profit $2.83. For the current year, the average estimate has moved down from a profit of $10.07 to a profit of $9.92 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)