Ceradyne Inc. reported a 40.6 percent drop in earnings Tuesday because of smaller orders for lightweight body armor from the U.S. military, and it lowered its earnings forecast for the rest of the year.
The stock, listed as CRDN, dropped by $6.43, or 26.16 percent, to close at $18.15 a share, after falling as low as $16.01 during the day.
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Ceradyne, a California company that has two ceramics plants in Lexington, also disclosed that the U.S. Army has received a protest over a large contract awarded to Ceradyne earlier this month. BAE Systems, a competing bidder, filed the protest after the Army awarded Ceradyne a $2.4 billion, five-year contract for XSAPI, the next generation of body armor. Ceradyne can't start work under that contract until the protest is resolved.
"We anticipate the protest will be resolved in a short period of time," Ceradyne said.
For the quarter that ended Sept. 30, Ceradyne earned $19.4 million, or 73 cents a share, compared with $32.7 million, or $1.16 a share, for the third quarter of 2007.
Revenue for the latest quarter totaled $167.7 million, down from $191.6 million for the same months of 2007.
The latest quarter's results also include one-time charges of $9.8 million, or 31 cents a share, from the acquisition of SemEquip Inc. in August.
Excluding those charges, Ceradyne earned $1.04 a share, but that was less than the $1.13 that analysts polled by Reuters Estimates had been expecting.
For the nine months that ended Sept. 30, Ceradyne earned $85.5 million, or $3.18 a share, compared with $109 million, or $3.93 a share, for the first nine months of 2007.
Nine-month revenues were $541.3 million, compared with $565.4 million for the same months of 2007.
Ceradyne said it now expects to earn $695 million to $700 million, or $4 to $4.15 a share, for 2008, down from an earlier prediction of $4.25 to $4.80 a share. It also forecast earnings of $640 million to $650 million, or $3 to $3.25 a share, for 2009.
Joel P. Moskowitz, Ceradyne's chief executive officer, told analysts during a conference call that Ceradyne has more than $200 million for acquisitions in 2009.
"We are not looking right now at a major acquisition," Moskowitz said. "We are looking at some smaller ones."