Global Fastener News

SPS Pumps Up Precision Castparts Sales

John Wolz

Sales from the SPS Technologies segments spurred Precision Castparts Corp. sales and earnings for its first fiscal quarter of 2005. PCC outperformed analyst expectations with market share gains, aftermarket sales, SPS performance and growth in the company’s industrial businesses.
Sales totaled $738.8 million, which included $527.4 million from Portland, OR-based PCC base businesses and $211.4 million from the SPS operations, compared to $475.7 million in the first quarter of last year.
Net income from continuing operations was $52.4 million, or 56% over the first quarter of fiscal 2004.
Investment Cast Products reported fiscal Q1 sales of $303.4 million and operating income of $55.0 million, compared to total sales of $244.5 million and operating income of $43.4 million during the same period last year.
While most of the growth resulted from the addition of the Specialty Materials & Alloys business acquired with SPS, investment casting sales in PCC’s base businesses grew by 8.2%.

Fastener Products’ sales were $164.1 million, with operating income of $16.6 million. Fastener products more than doubled its operating margins over the course of the two quarters following the acquisition of SPS in December 2003, with further upside from purchasing synergies, productivity improvements, operational discipline and leverage from higher sales. “Already capitalizing on several opportunities for market share gain at major customers such as Airbus, Fastener Products will continue to leverage its lower cost base to drive higher sales,” the company summarized.
Total first quarter sales for PCC”s Industrial Products were $42.3 million, with operating income of $5.7 million, compared to $31.6 million and $4.4 million in the first quarter of fiscal 2004. Following last quarter’s restructuring, PCC Precision Tool Group is already seeing improvement in its operating margin from the consolidation of Reed-Rico with the SPS tool businesses.

“Fastener Products has proven to be a truly great addition to the company, and we are extremely pleased with the segment’s performance to date,” CEO Mark Donegan continued. “Key to this performance has been the ability of the SPS team to zero in on the significant issues and to execute effectively across the board. Our focus moving forward will be to leverage our improved cost position to increase the segment’s top line. We are now systematically identifying and going after the many market opportunities available to us.” Web: precast.com �2004 FastenerNews.com