Materion Warns On Q3 Profit, But Sees Strong Q4; Shares Down

(RTTNews) - Materion Corp. (MTRN) provided an update on expected third quarter 2013 results, and fourth-quarter outlook and initiatives to reduce costs and improve margins.

It expects earnings for the third quarter to be about $0.20 per share. Analysts polled by Thomson Reuters expect the company to report earnings of $0.39 per share for the third-quarter. Analysts' estimates typically exclude special items.

According to the company, the previously announced weaker business conditions being experienced at the beginning of the third quarter of 2013 did not improve during the third quarter to the level that the Company originally anticipated. Order entry has been highly variable, and business levels have been increasing at a slower than expected rate. In addition, shipments of certain high-margin beryllium-based defense and nuclear science as well as defense optics orders have been delayed.

The company noted that Profits were also adversely affected by lower manufacturing yields and efficiencies in the quarter. The impact of these factors has been offset, in part, by continued strong business levels in the medical, commercial aerospace, automotive electronics and commercial optics markets.

The company expects to ship the delayed orders in the fourth quarter. In addition, production levels at the Company's new beryllium pebble plant continued to increase throughout the third quarter and were at record levels in the month of September, well ahead of the fourth quarter target.

As a result of these and other factors, the company expects results for the fourth quarter to be well ahead of the third quarter and the strongest of the year, exceeding the $0.43 per share reported in the second quarter, absent the impact of the actions. Analysts expect the company to report earnings of $0.57 per share for the fourth quarter.

The company said it plans to take additional facility and product line rationalization actions during the fourth quarter which will further reduce costs and significantly improve margins beginning in 2014. These actions will result in a charge of up to $0.15 per share in the fourth quarter, approximately 25% of which is non-cash. These are expected to favorably impact 2014 performance by up to $0.30 per share.

MTRN is currently trading at $29.40, down $2.92 or 9.03%.