* Sees real aerospace business recovery only in 2011
* Says pricing in aerospace business remains soft
* Sees positive H2 2010
* Shares fall 19 pct
(Adds analyst comments, details from conference call, share
By Krishna N. Das and Antonita Madonna Devotta
BANGALORE, April 27 A.M. Castle & Co CAS.N
reported a wider-than-expected first-quarter loss, and said it
expects to remain in the red for the second quarter as well,
sending its shares down as much as 19 percent.
The specialty metals and plastics distribution company
added that it hopes of a profitable second half, if economic
Shares of the Franklin Park, Illinois-based company fell 19
percent to a low of $15.33, and were among the top percentage
losers Tuesday on the New York Stock Exchange.
On a conference call with analysts, A.M. Castle, which
counts Lockheed Martin Corp (LMT.N) among its customers, said
aerospace business will continue to be a drag.
"Real recovery in aerospace is expected only in 2011," the
company said, adding that capacity continued to exceed demand
and pricing remained soft.
"They have more exposure to aerospace and businesses that
tend to be bit slower to recover versus lot of others," Hudson
Securities analyst Nat Kellogg said.
"Their expectation for the second quarter continues to be
challenging," he added.
Kellogg currently expects the company to post a small
profit or breakeven in the second quarter.
Analysts on average expect A.M. Castle to post a loss of 2
cents a share in the second quarter, followed by profit of 12
cents each in the third and fourth quarter, according to
Thomson Reuters I/B/E/S.
The company, however, said it sees gross profit margins
improving throughout the balance of the year.
Lower sales and margins of 24.2 percent, which A.M. Castle
said was below its own expectations, weighed on the company in
the first quarter.
"Reported gross profit margins were lower than we had
expected primarily due to the competitive pricing environment,"
For the first quarter, the company reported a loss of 20
cents a share, wider than analysts' estimates of a loss of 12
cents a share.
Net consolidated sales fell about 12 percent to $223.0
million, marginally above estimates of $221.1 million.
(Reporting by Krishna N. Das and Antonita Madonna Devotta in
Bangalore; Editing by Jarshad Kakkrakandy, Maju Samuel)