UPDATE 2-Insteel posts weak Q3 profit, sees no near-term rebound

Thu Jul 22, 2010 11:21am EDT

* Q3 EPS $0.09 vs est $0.18

* Q3 rev up 9 pct, beats Street

* Says construction demand depressed * Cuts FY10 capex outlook to less than $3 mln

* Shares down 13 pct

(Recasts; adds conference call comments, share movement)

BANGALORE, July 22 (Reuters) - Insteel Industries Inc (IIIN.O) posted a quarterly profit that missed estimates, and said it expects weakness in the construction sector to continue for the rest of 2010, sending its shares down as much as 13 percent.

Chief Executive H.O. Woltz III said he expects business conditions to remain challenging with demand in private non-residential construction still depressed.

"Non-residential construction industry is now a lagging industry," company officials said in a conference call with analysts.

The infrastructure spending has also been down and the overall environment will not rebound any sooner, the company said.

The company also said it expects 2010 capital expenditure to be less than $3 million, lower than its prior capital expenditure view of less than $5 million.

However, the company said it ended the quarter debt-free.

Insteel's steel wire products are sold mainly to manufacturers of concrete products used in non-residential construction.

For the latest third quarter, net income was $1.6 million, or 9 cents a share, compared with a net loss of $1.7 million, or 10 cents a share, last year.

Revenue for the quarter rose 9 percent to $62 million.

Analysts on average expected the company to post earnings of 18 cents a share on revenue of $60.8 million, according to Thomson Reuters I/B/E/S.

Insteel's shares recouped some initial losses to trade down 10 percent at $9.75 Thursday late morning trade on Nasdaq. They had touched a low of $9.39 earlier in the day.

(Reporting by Thyagaraju Adinarayan in Bangalore; Editing by Don Sebastian, Prem Udayabhanu)

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