CPI Aerostructures reports earnings drop 32%
Aircraft parts maker CPI Aerostructures Inc. of Edgewood Tuesday blamed lower profit margins for a 32 percent decline in its third-quarter net income.
The company, which produces structural parts for defense and commercial planes and helicopters, said it earned $1.9 million, or 23 cents a share, in the three months ended Sept. 30, down from $2.8 million, or 33 cents a share, a year earlier.
Total revenue for the quarter was down 3.2 percent from a year earlier at $20.7 million.
CPI blamed the declines on "substantially lower revenue from prime government contracts, offset by higher revenues generated from government and commercial subcontracts."
Revenues from prime government contracts fell by 80 percent in the first nine months of this year from a year earlier, to about $1 million, the company said.
But Edward J. Fred, CPI's chief executive and president, said the company's total backlog at Sept. 30 was 12 percent higher than on Dec. 31, at $439.7 million.
The company said gross margin was 21.7 percent in the quarter, down from 27.2 percent a year earlier. In a statement, Fred blamed adjustments to long-term programs with Spirit AeroSystems, Northrop Grumman and Boeing and to its program providing parts for the Lockheed C-5 Galaxy, a military transport plane.
"Our gross margin should substantially improve in the fourth quarter of 2013, and we currently expect our gross margin for the 2013 full year to be within the range of 23 percent to 24 percent," Fred said. The company was taking steps to reduce costs, he said.
The stock gained 58 cents to close at $13.