Ferro misses by $0.04, misses on revs; guides FY11 EPS, revs below consensus (6.47 +0.29)
Reports Q3 (Sep) earnings of $0.23 per share, excluding non-recurring items, $0.04 worse than the Capital IQ Consensus Estimate of $0.27; revenues rose 3.3% year/year to $546.1 mln vs the $572.8 mln consensus. Co issues downside guidance for FY11, lowers EPS to $0.70-0.80, excluding non-recurring items, from $1.08-1.18 vs. $1.07 Capital IQ Consensus Estimate; lowers FY11 revs to $2.15-2.20 bln from $2.30-2.35 bln vs. $2.31 bln Capital IQ Consensus Estimate. The reduced sales forecast is primarily due to lower sales expectations for electronic materials products, including conductive pastes, metal powders and surface finishing products. Weakening economic conditions, particularly in Europe and the United States, also reduced sales forecasts for a number of product lines, particularly those used in building and construction applications. In addition, the co has updated its foreign currency exchange rate assumptions for the final three months of the year to be consistent with current exchange rates. The co expects sales of conductive pastes to decline by 25 to 35% in the 2011 fourth quarter compared with the sales recorded in the third quarter, based on current order patterns and declines in customer production plans. Previously, the co had expected demand for conductive pastes to begin to recover during the last three months of 2011. In addition, sales of other electronic materials, including metal powders and surface finishing materials, also are expected to decline by 20 to 25 percent in the fourth quarter because of reduced demand from consumer electronics and semiconductor-related applications. “We expect weaker fourth-quarter sales for a number of our products as global economic activity slows.”
