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UPDATE 2-GrafTech Q4 profit tops Street view
February 23, 2010 / 1:07 PM / 8 years ago

UPDATE 2-GrafTech Q4 profit tops Street view

* Q4 adj EPS $0.26 vs est $0.20

* Q4 rev falls 24 pct

* Expects Q1 to be its weakest quarter of the year

* Shares down 1 pct (Adds details on outlook, share movement)

Feb 23 (Reuters) - Graphite electrodes maker GrafTech International Ltd GTI.N reported a better-than-expected quarterly profit, helped by lower expenses, but said it expects the first quarter to be its weakest quarter of the year.

“Weak end market demand remains a risk to price realization as we work to complete our 2010 graphite electrode order book,” the company said in a statement.

GrafTech, whose electrodes are built into electric arc furnaces to recycle scrap metal into steel, said electric arc furnace steel end market demand is anticipated to remain below pre-crisis levels.

“Given the fragile state of economic recovery, limited customer visibility and shift in customer order patterns to shorter term contracts, our ability to project full year detailed guidance is limited,” the company said in a statement.

GrafTech expects raw material costs to be higher. The primary raw materials for graphite electrodes are needle coke, coal tar pitch and petroleum pitch.

The company, however, sees marginal improvement to earnings after the first quarter due in part to a slight increase in industrial material volumes.

GrafTech also expects its engineered solutions segment will begin to recover in the second half of 2010.

“We expect 2010 results to benefit from improved volumes in our graphite electrode business,” the company said.

In 2010, it sees capital expenditures of $70 million to $75 million.

For the fourth quarter, the company reported net income of $34.3 million, or 28 cents a share, compared with $34.6 million, or 29 cents a share, a year ago.

Excluding items, the company earned 26 cents a share.

Net sales for the company, which competes with SGL Group (SGCG.DE), fell 24 percent to $202.4 million.

Analysts on average were expecting earnings of 20 cents a share, on revenue of $195.3 million, according to Thomson Reuters I/B/E/S.

Selling and administrative expenses fell 23 percent to $19.0 million. Shares of the company were down 1 percent at $12.36 Tuesday morning on the New York Stock Exchange. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Jarshad Kakkrakandy)

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