Insteel Industries Inc. reports losses
Insteel Industries Inc. on Thursday said its loss narrowed in the first quarter as shipment volumes fell for the maker of steel-wire reinforcing products.
The company was also hurt by a shrinking margin between its selling prices and raw material costs. It said the usual seasonal downturn during the quarter was made worse by weakness in nonresidential construction and poor weather.
The company expects rough business conditions would continue in the second quarter, and its shares fell $1.23, or 10.4 percent, to $10.60 in afternoon trading.
President and CEO H.O. Woltz III said the downturn in nonresidential construction, especially for commercial projects, “appears to be in its early stages, with minimal improvement anticipated until there is an overall recovery in the economy and in the labor market.”
In addition, he said new federal highway spending is still uncertain. Any help that would come from federal stimulus spending is likely to be offset by state and local budget shortfalls, Woltz said.
Meanwhile, raw material prices are rising. Recovering the extra costs could be difficult, Woltz said.
Insteel lost $1.1 million, or 7 cents a share, for the quarter ending Jan. 2 compared with a loss of $5.6 million, or 33 cents a share, a year earlier.
Sales fell by a third to $41.2 million from $61.8 million a year earlier.
The results included a charge of $1.9 million, or 7 cents per share, for inventory write-downs. The year-ago period included a charge of $6.8 million, or 24 cents per share, for the same thing.
Analysts surveyed by Thomson Reuters, who generally exclude one-time charges, had been expecting a profit of 5 cents per share on revenue of $50.2 million.