Ceradyne revenue falls by nearly half

Ceradyne Inc., which manufactures body armor in Lexington, said Tuesday that its earnings fell nearly 50 percent in the first quarter, driven by delays in federal government orders for body armor.

"That revenue got pushed into the second quarter instead of the beginning of the first quarter," chief financial officer Jerry Pellizzon said.

The industrial side of the company's business is also "feeling the impact of the deep recession we're in," he said. That portion of the company produces ceramics that end up as part of new construction projects such as high-rise buildings, he said.

The company noted that it has been cutting costs to improve results going forward and has reduced its U.S. work force by 33 percent, or 592 workers, since the start of 2008.

The company has laid off 125 temporary and full-time workers in its three divisions in Lexington. It will have about 200 workers in the city. The company has about 2,300 workers worldwide.

Revenue fell from $188.5 million in the first quarter of 2008 to $99.8 million this year. Net income decreased from $32.4 million year-over-year to $700,000. Earnings per share were $1.18 in the first quarter of 2008 and 3 cents in 2009.

The company said new orders for products in the first quarter were $150.7 million, down from $211.8 million year-over-year.

The body-armor order received later than expected was issued on March 31 and was for $77 million, Ceradyne said. That order is for the XSAPI production line and is part of a $2.37 billion five-year award announced last October.

The company said it has already begun shipments on the $77 million order and expects to complete them by the end of the year.

The order's arrival and future orders probably won't mean more jobs in Lexington, Pellizzon said.

"We'd like to say there is (a chance), but we don't know," he said. "It's possible we could get some orders that could bring some back on, but it's going to be tough."

Pellizzon said the company expects earnings to improve through the rest of the year because of the XSAPI order. The company had previously said it expects 2009 revenue of $465 million to $500 million and reiterated that guidance on Tuesday.

It did note that its performance probably would be at the low end of the range.

Shares of Ceradyne (CRDN:Nasdaq) fell $1.35, or 7.1 percent, to close Tuesday at $17.71.