Last Call: Haynes International falls on 2Q earnings miss

NEW YORK - Shares of Haynes International Inc. dropped Friday after the maker of nickel and cobalt alloys said its fiscal second-quarter profit fell 13 percent and widely missed the Street's expectations.

After the closing bell Thursday, Haynes reported its net income fell to $15.1 million, or $1.25 per share, from $17.4 million, or $1.63 per share, in the same quarter of fiscal 2007. Revenue climbed 19 percent to $163.8 million from $137.3 million.

Analysts polled by Thomson Financial expected higher earnings of $1.33 per share, with revenue of $159.4 million.

Chief Executive Francis Petro cited as challenges "the competitive environment, the planned outages related to our capital upgrade program and increased raw material costs."

In a client note Friday, KeyBanc Capital Markets analyst Mark Parr trimmed his earnings per share forecast for the 12 months ending in September to $5.05 from $5.50.

Parr, who also lowered his fiscal 2009 earnings per share forecast to $6.25 from $6.75, cut his price target to $75 from $80.

"Margins continue to be impacted by competitive pressures via companies producing both stainless steel and high-performance alloy products," Parr wrote in a client note.

"We are tempering the timing of our gross margin recovery forecast, as competitive pressures, while easing, appear to have persisted a bit longer than our previous outlook."

Despite the lower price target and earnings forecasts, Parr retained his "Buy" rating on the shares, adding that Haynes "remains one of our favorite ideas over the next 12 to 18 months."

Shares fell $1.77, or 2.9 percent, to $60.03 in afternoon trading.

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