Service Centers
A.M. Castle Preliminary Results Lower than Expected
Written by Sandy Williams
October 10, 2013
Global distributor A.M. Castle & Co. expects a third quarter loss of 28 to 32 cents per share and EBITDA between $4 million and $5 million according to preliminary results announced on Oct. 8. Sales are expected to range between $250 million and $255 million for the quarter.
Projections were well below analyst estimates of losses ranging between 7.0 percent (Thomson Reuters poll) and 20 percent (Key Banc), prompting adjustments to the market estimates for the quarter and year. Analysts suggested A.M. was hurt by increased metal costs that were not passed through to customers and lower volume sales.
A.M. Castle reported challenging industry conditions, weakness in key end markets and softness in market selling prices as contributing to lower sales and earnings.
“We expect cost savings related to restructuring initiatives executed in the first half of 2013 to be in line with expectations and the cost structure to perform as anticipated,” said CEO, Scott Dolan. “Inventory reductions and cash generation results remain intact despite lower volume levels, demonstrating the success of our cost reduction activities earlier this year.”
A.M. Castle is a global distributor of specialty metal and plastic products and supply chain services. Its metals service business specializes in distribution of alloy and stainless steels, nickel alloys, aluminum and carbon. The company will release final third quarter results on Tuesday, October 29, 2013.
Sandy Williams
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