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Precision Castparts Sales Grow 5.6% in 1Q Fiscal 2011

Precision Castparts Corp. (NYSE:PCP) sales in its first quarter fiscal 2011 grow 5.6 percent to $1.45 billion from the prior-year period, driven by commercial aerospace OEM growth of 15 percent and general industrial growth of 50 percent.

Profit from continuing operations was $236.1 million, up from last year.

By segment, Investment Cast Products sales were $486.7 million, up slightly from sales in the prior-year period. Contractual material pass-through pricing of about $10 million was roughly equivalent to the prior year. Sequentially, Investment Cast Products sales grew by approximately 5 percent. 

Forged Products sales in the first quarter were $631.2 million, up from $539 million in the prior-year period. Aerospace and general industrial sales saw year-over-year growth of about 40 percent and 70 percent respectively in this segment. Excluding the impact of Carlton Forge, aerospace sales grew 5 percent. 

Seamless pipe sales faced "tremendous headwinds," the company reported, declining sequentially by nearly 50 percent, similar to the year-over-year decrease. 

Fastener Products sales were $328.9 million. Sequentially, the segment held sales relatively flat by expanding its non-core product lines to offset declines in core products, as aerospace OEM and distributors reduced inventory levels. 

“We saw very positive signs of recovery in some of our core markets during the quarter, while directly facing a major challenge in our seamless pipe business,” said Mark Donegan, CEO.  “Commercial aerospace OEM sales grew by approximately 15 percent year over year, as our shipments begin to sync again with actual aircraft production rates.  In addition, general industrial sales showed solid growth, increasing by approximately 50 percent year over year and approximately 10 percent sequentially.  As we anticipated, aerospace fastener distributor sales and schedules from European IGT customers were flat sequentially.  However, we battled the massive effect of declining seamless pipe sales to China in the quarter, which had a significant negative impact on both top- and bottom- line performance in the Forged Products segment."

Precision Castparts Corp. is a diversified manufacturer of complex metal components and products.  It serves the aerospace, power generation, and general industrial markets. 

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