Quanex Updates Fourth Quarter Guidance
11/05/2007 - Quanex expects to report fiscal 2007 diluted earnings per share from continuing operations in a range of $3.30 to $3.35, driven by flat growth in North American light vehicle builds and a nearly 25% reduction in housing starts.
Quanex Corp. expects to report fiscal 2007 diluted earnings per share from continuing operations in a range of $3.30 to $3.35 when it reports results on December 4, 2007.
This compares to previous guidance of $3.38 to $3.46 for 2007, which included a $0.13-per-diluted-share LIFO charge, but did not include $0.08-per-diluted-share of non-operational costs.
The Vehicular Products segment—which is drivenprimarily by North American light vehicle builds—expects to report higher fourth-quarter net sales, and operating income in line with the fourth quarter of 2006. The company attributes the increase in net sales—expected to be some 10% higher than the year-ago quarter— primarily to higher material surcharges. The company said operating income will be impacted by high input costs. North American light vehicle builds in the company's fourth quarter are estimated to be about even compared to a year ago.
The Building Products segment—driven primarily by U.S. housing starts and remodeling activity—expects to report lower net sales and operating income compared to the fourth quarter 2006 because of a nearly 25% reduction in housing starts. Net sales at Engineered Products, a producer of window and door components, are anticipated to be down some 10% compared to the year-ago quarter due to acceleration in the decline of housing starts during the quarter. Engineered Products' operating income is expected to be essentially in line with the year ago quarter. The segment’s Nichols Aluminum expects to report flat shipped pounds compared to the year-ago quarter, while operating income is anticipated to be down slightly due to lower material spreads.
The company's current fiscal 2007 guidance includes a reduction of approximately $0.08 per diluted share for non-operational items that were not in its previous guidance. These items include an additional non-cash LIFO charge, cash costs associated with the company's strategic initiatives, and an earnings-per-share reduction related to an increase in the dilutive effect of the company's convertible debentures.
Quanex Corp. is an industry-leading manufacturer of value-added engineered materials and components for the vehicular products and building products markets.
