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Precision Castparts announces Q3 FY 2012 results for Fastener Products
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Tuesday, 31 Jan 2012
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Total third quarter sales for Fastener Products grew by 35% over the same period a year ago, producing USD 463.2 million of sales compared to sales of USD 344.1 million in the third quarter of fiscal 2011. Approximately USD 100 million of this sales growth was from the two recent acquisitions, the bulk of it coming from Primus. In the base business, aerospace sales grew by 5% over last year on the strength of increased backlogs at the beginning of the third quarter, and the segment leveraged this incremental business effectively. Clearly, the 787 program will be a major growth catalyst for Fastener Products. In the third quarter, however, production of 787 critical fasteners was flat year over year and averaged less than one ship set per month of production, and Primus, which has more than USD 1 million of content on each 787, is delivering approximately two 787 ship sets per month. While the segment continues to lag 787 production rates, customer inventory levels are steadily being depleted, at which point demand will begin to align with Boeing build rates. Longer term, the segment will benefit from a second step up as the 787 schedule accelerates. In addition to this growth, sales will also improve through fiscal 2013 as market share gains in the new Boeing contract move into production. The segment’s operating income in the quarter was USD 124.1 million or 26.8% of sales, compared to operating income of USD 104.8 million or 30.5% of sales, in the third quarter of fiscal 2011. The base fastener businesses performed well year over year, with operating margins diluted by the addition of Primus for a full quarter and PB Fasteners, which have reset this segment' margin baseline.

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