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Welded steel pipe maker Northwest Pipe Co. (NWPX - Snapshot Report) posted first-quarter 2013 earnings of $1.00 per share, outpacing the Zacks Consensus Estimate of 30 cents and exceeding the year-ago quarter’s earnings of 50 cents. Profit roughly doubled year over year to $9.5 million on strength in the company’s Water Transmission unit.
Revenues, however, inched down roughly 1% year over year to $140.6 million as solid gains in Northwest Pipe’s Water Transmission division was offset by a decline in the Tubular Products segment. But sales topped the Zacks Consensus Estimate of $127 million. Gross margin rose to 15.1% from 11.6% a year ago.
Revenues from the Water Transmission segment soared 34.5% year over year to $78.6 million in the reported quarter as a solid jump in tons produced more than offset lower pricing. The division’s results were also boosted by the Lake Texoma water pipeline project, the largest project in the company’s history.
However, revenues from Northwest Pipe’s Tubular Products unit tumbled 26% to $62 million. The division was hurt by lower pricing and a double-digit decline in tons sold during the quarter.
Northwest Pipe ended the quarter with order backlog of roughly $136 million in the Water Transmission division, down 15.5% year over year. Continued competitive pressure stemming from the imports of energy products and lower rig count hurt the division.
Cash and cash equivalents, at the end of the quarter was $47 million, down 47% year over year. Total long-term debt declined around 30% year over year to $20.9 million.
Moving ahead, Northwest Pipe sees sequentially lower sales and gross profit in the Water Transmission unit in the second quarter. In Tubular Products, the company envisions near breakeven results as the segment’s profitability is expected to be impacted by increasing imports of competing energy products.
Northwest Pipe makes large-diameter steel pipeline systems for use in water infrastructure applications, mainly in drinking water systems. The company also makes smaller diameter, electric resistance welded steel pipes and other similar products for use in energy, construction, agriculture, commercial and industrial, and traffic signpost applications.
Northwest Pipe currently retains a Zacks Rank #2 (Buy).
Other companies in the metal processing and fabrication industry with favorable a Zacks Rank are NSK Ltd. (NPSKY), Worthington Industries, Inc. (WOR - Snapshot Report) and TriMas Corporation (TRS - Snapshot Report). While NSK holds a Zacks Rank #1 (Strong Buy), both Worthington and TriMas carry a Zacks Rank #2 (Buy).