OCTG

Northwest Pipe earnings decline in Q4, FY2023

March 4, 2024

Northwest Pipe Co.

Fourth quarter ended Dec. 31	2023	2022	% Change
Net sales	$110.2	$106.8	3.1%
Net earnings	$5.4	$8.0	-31.6%
Per diluted share	$0.54	$0.79	-31.6%
Twelve months ended Dec. 31
Net sales	$444.4	$457.7	-2.9%
Net earnings	$21.1	$31.1	32.4%
Per diluted share	$2.09	$3.11	-32.8%

(in millions of dollars except per share)

Northwest Pipe posted lower earnings in the fourth quarter as the company said it faced “significant challenges” in its engineered steel pressure pipe (SPP) and precast businesses in full-year 2023.

The Vancouver, Wash.-based pipe producer reported net income of $5.4 million in Q4’23, down 31.6% from $8.0 million a year earlier on net sales that increased 3.1% to $110.2 million.

However, for full-year 2023, net sales slipped 2.9% to $444.4 million. (See table above.)

“Despite the challenging circumstances of 2023, we generated annual net sales of $444.4 million, down only moderately from 2022,” Scott Montross, president and CEO, said in a statement on Monday.

He noted that the SPP business “had one of the smallest bidding volume periods we have seen in many years, and the precast business continued to be suppressed by the interest rate environment throughout 2023.”

SPP, precast segments

The SPP segment had net sales of $75.1 million in Q4 vs. $72.1 million a year earlier, which the company said was driven by a 2% increase in tons produced. That gain resulted from changes in project timing and a 2% increase in selling price per ton primarily, the company said.

The precast business reported $35.1 million in net sales in Q4, up from $34.7 million in the same period a year earlier. Northwest Pipe cited “a 25% increase in volume shipped due to product mix, partially offset by a 19% decrease in selling prices due to both product mix and decreased demand.”

Outlook

Looking ahead, Montross said the company anticipates a significantly stronger bidding year in 2024 for its SPP segment. But he added that “typical seasonality” and “severe weather conditions that have led to unscheduled downtime time at several facilities” would impact Q1’24 net sales.

Therefore, he said, “first-quarter SPP net sales are expected to decline compared to the fourth quarter of 2023, but expected to remain well above first quarter 2023 levels.”

Montross noted that sever weather also caused “unscheduled downtime in our precast facilities, further suppressing the already seasonally slow first quarter.”

“We expect precast net sales in the first quarter to be similar to the same quarter last year with near-term margins remaining compressed,” he said.

Ethan Bernard

Ethan Bernard is a reporter and editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.