CPI Aero sales inch up; profits fall
CPI Aerostructures Inc., the Edgewood aircraft parts maker, said Thursday its second-quarter sales rose modestly as the aerospace industry comes to grips with spending cuts in Washington.
The company said revenue increased to $21.1 million during the three months ending in June, up about 1 percent from the same period last year, as government contractors begin to better understand how across-the-board cuts known as the sequester affect particular defense projects.
"Even with the federal budget sequester, we have recently seen acceleration in new order releases for military aircraft as our customers have received more definite information regarding certain key defense programs," CPI Aero president and chief executive Edward J. Fred said during a call with analysts.
Despite the rise in sales, CPI's profit fell 34 percent, to $1.8 million or 21 cents a share, as the company's margins shrank on long-term contracts with Spirit, Northrop Grumman and Boeing.
Fred said he expects the company's full-year 2013 revenue to be lower than in 2012. But he called the sequester a "temporary setback," saying he expected CPI's sales to resume growing in 2014.
Shares of CPI fell about 4 percent Thursday, to $10.70.