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NEW YORK: Ceradyne Inc., which makes ceramic plates for body armor, on Wednesday posted better-than-expected earnings in the third quarter, driving its shares up 8 percent, as sales surged on strong demand from the U.S. military.
Net profit jumped to $36.9 million, or $1.34 a share, from $13.3 million, or 53 cents a share, in the same period last year. The results handily beat analyst expectations of $1.15 a share, according to Reuters Estimates.
Analysts expect the company's strong performance to continue as the U.S. government ramps up spending on equipment to protect soldiers in Iraq and Afghanistan.
“Spending related to body armor and other troop-oriented expenditures are going to be higher, and Ceradyne should certainly benefit from that,” said Al Kaschalk, an analyst with Wedbush Securities.
Ceradyne, which also makes ceramic materials for industrial use, has been benefiting from U.S. military demand for its light-weight ceramic body armor as hostilities continue in Iraq.
Sales nearly doubled to $185.8 million from $94.4 million, driven by defense sales. New bookings in the quarter rose to $138.3 million compared to $67.8 million in the same period last year. Its backlog as of Sept. 30 was $209.1 million.
Ceradyne, based in Costa Mesa, Calif., has responded to the robust demand with increased body armor production and an expansion of its industrial business. The company said it broke ground in the past week on a facility in Tianjin, China, for manufacturing materials for solar cells.
Ceradyne shares, which are down 22 percent over the last six months, were up $3.30 to $44.55 in morning trade on Nasdaq.
