Specialty alloy producer Haynes International anticipates lower demand heading into the next quarter as customers grow more cautious.
Haynes expects to draw down scrap inventory at the company's Kokomo, Indiana, alloy mill heading into the second quarter amid the Boeing 737 MAX production halt. The company expects the demand drop in the near term to impact volumes as customers grow more cautious and have begun conserving spending.
Executives estimate the Boeing 737 MAX comprises 8pc of the company's total volumes.
Quarterly revenue rose by 1pc to $108mn from the prior year period and the company posted a $3.2mn profit, compared to a $1.6mn loss the previous year period. Total shipments across all business segments declined by 2.5pc to 4.3mn lbs.
Sales from the aerospace industry in the quarter grew by 8pc to $59mn from the year earlier period. Quarterly aerospace alloy shipments rose by 9pc to 2.3mn lbs over the same period. In the prior year quarter, equipment maintenance weighed on sales which lifted the most recent quarter's sales higher comparably. The company said the slow-down of the Boeing 737 MAX production impacted sales and put downward pressure on shipments.
Chemical processing industry sales declined by 12pc to $17mn from the prior year period. Segment shipments declined by 12pc to 788,000lbs year-over-year.
Quarterly sales from the industrial gas turbine sector decreased by 2pc to $14mn from the year earlier period. Despite the decline in sales, shipments by volume increased by 2pc to 825,000 lbs over the same period. Stronger demand for large-frame turbines lifted volumes higher, while small- and medium-frame engine builds weighed on shipments.
Sales from other markets, like emerging energy generation technologies, were down by 17pc at $12mn from the previous year period. The decrease in shipments was more pronounced, declining by 40pc to 306,000 lbs in the most recent quarter from the previous year. The decline in shipments was largely attributable to a decrease in sales to the flue-gas desulpurization market.
By Nicholas Bell
