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Northwest Pipe Beats Estimates

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Welded steel pipe maker – Northwest Pipe Co. (NWPX - Free Report) reported fourth-quarter 2012 earnings of 48 cents per share, topping the Zacks Consensus Estimate of 28 cents and surpassing the year-ago quarter’s earnings of 15 cents. Profit propelled roughly three-fold year over year to $4.5 million on higher sales.

For full-year 2012, earnings of $1.72 per share outpaced the Zacks Consensus Estimate of $1.52 and were higher than $1.35 a share recorded a year ago. Profit surged 28% year over year to $16.2 million as higher sales from Northwest Pipe’s Tubular Products segment offset a decline in the Water Transmission unit.
Revenues jumped nearly 16% year over year to $136.2 million in the fourth quarter as solid gain in Water Transmission masked a decline in Tubular Products. Sales topped the Zacks Consensus Estimate of $117 million. Gross margin rose to 10.7% from 9.5% a year ago. 
For the full year, sales rose nearly 3% year over year to $524.5 million, exceeding the Zacks Consensus Estimate of $506 million. 
Revenues from the Water Transmission segment surged 43% year over year to $88.2 million in the reported quarter, partly driven by the Lake Texoma water pipeline project. Northwest Pipe, in Jul 2012, was awarded a contract to supply welded steel pipe for the project which will restore North Texas Municipal Water District's raw water supply. This is the largest project in the company’s history. 
However, revenues from the Tubular Products slipped roughly 13% to around $48 million. The division was hurt by competitive pressure stemming from the imports of energy products, lower drilling activity and a decline in natural gas prices.
Northwest Pipe ended 2012 with order backlog of roughly $173 million in the Water Transmission division, a 25% year-over-year increase.
Cash and cash equivalents, at the end of 2012, was $46 million, down 74% year over year. Total long-term debt declined 27% year over year to $24.5 million. 
Moving ahead, Northwest Pipe expects profitability in the Water Transmission unit in first-quarter 2013 to be somewhat similar to the level achieved in the fourth quarter. It, however, expects the division’s sales to decline in the first quarter. In Tubular Products, Northwest Pipe sees 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, in Jan 2013, announced the appointment of Duke Watson as the Vice President of Sales for its Tubular Products unit. Prior to joining the company, Duke served as the director of sales and marketing in the Abandonment and Construction division of oilfield service company Tetra Technologies Inc. (TTI - Free Report) .
Northwest Pipe currently retains a Zacks Rank #5 (Strong Sell). 
Other companies in the metal processing and fabrication industry with favorable a Zacks Rank are Kaydon Corporation and NSK Ltd. . Both hold a Zacks Rank #2 (Buy).

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