Second Quarter Fiscal 2010 Highlights (from Continuing Operations)
   * Consolidated segment operating income margin of 25.9%
   * EPS from continuing operations of $1.54 (diluted)
   * Total cash of $743 million and debt of $260 million

PORTLAND, Ore., Oct. 20, 2009 (GLOBE NEWSWIRE) -- With sales declines appearing to bottom out in the second quarter of fiscal 2010, Precision Castparts Corp. (NYSE:PCP) continued to focus on leveraging its operational strengths, improving operating margins from continuing operations by 3.4 percentage points over the second quarter of fiscal 2009 on 28 percent lower year-over-year sales. The lower sales were driven by further aerospace destocking, economic pressures on the general industrial markets, planned downtime of major forging complexes, and seasonal European holidays.

Second Quarter Fiscal 2010 Financial Highlights

Sales in the second quarter of fiscal 2010 totaled $1.3 billion, compared to sales of $1.8 billion last year. Included in the year-over-year sales decline were the negative effects of foreign exchange of approximately $29 million, lower material pass-through of approximately $37 million, and lower selling prices of external alloys at the Company's three primary mills of approximately $62 million. Precision Castparts Corp. (PCC) delivered operating income of $337.0 million, or 25.9 percent of sales in the second quarter of fiscal 2010, versus $404.1 million, or 22.5 percent of sales a year ago. Total net income from continuing operations in the second quarter was $218.3 million, compared to $265.1 million in the same quarter last year. Earnings per share from continuing operations in the quarter were $1.54 (diluted, based on 141.6 million shares outstanding), compared to earnings per share from continuing operations of $1.88 (diluted, based on 140.7 million shares outstanding) in the second quarter of fiscal 2009.

The Company took a pre-tax impairment charge of $11.6 million related to certain assets of discontinued operations, resulting in net income including discontinued operations of $207.3 million, or $1.46 per share (diluted) for the second quarter of fiscal 2010, as compared to net income including discontinued operations of $269.3 million, or $1.91 per share (diluted) in the same quarter last year.

Business Highlights

Investment Cast Products: Investment Cast Products continued to drive operating performance, improving second quarter operating margins to 30.4 percent of sales, versus 25.5 percent of sales last year. The segment's operations focused squarely on the daily cost control and productivity metrics within their direct control, successfully overcoming the challenge of continued aerospace OEM and aftermarket destocking that negatively impacted segment aerospace sales in excess of 25 percent year-over-year. Second quarter sales totaled $447.4 million, compared to sales of $612.0 million a year ago. Contractual material pass-through pricing declined from $23.8 million in the second quarter of fiscal 2009 to $9.1 million this year. Investment Cast Products' operating income was $136.0 million for the quarter, versus operating income of $156.1 million during the same period last year.

Forged Products: Total second quarter sales for the Forged Products segment were $516.7 million, versus sales of $781.1 million in the second quarter of fiscal 2009. Year over year, segment sales were negatively impacted by approximately $83 million, due to lower contractual material pass-through pricing and lower selling prices of external alloy sales from the segment's three primary mills. Continued inventory destocking reduced year-over-year aerospace sales for the segment by more than 30 percent and general industrial sales in excess of 40 percent, while sales of seamless pipe held steady during the quarter. In addition, Forged Products once again faced seasonal operating challenges in the second quarter, with preventative maintenance across the segment's major forging complexes. Confronted with these strong downward pressures, the segment actually improved operating margins by 3.6 percentage points compared to last year. Forged Products' operating income and margins were $120.0 million, or 23.2 percent of sales, in the second quarter, versus $153.1 million, or 19.6 percent of sales, a year ago.

Fastener Products: In the second quarter of fiscal 2010, Fastener Products sales totaled $338.0 million, versus sales of $405.6 million last year. Destocking at OEMs and distributors negatively impacted aerospace sales by approximately 10 percent year over year, where regional/business aircraft play a more significant role than in other segments. In addition, weak economic conditions caused a year-over-year decline in general industrial/automotive sales of approximately 20 percent. Year-over-year, operating margins improved, with the segment achieving operating margins of 32.5 percent on operating income of $109.8 million in the second quarter, compared to operating margins of 29.2 percent on operating income of $118.5 million a year ago. The segment focused its daily efforts on further productivity and cost improvements on a factory-by-factory basis and gained traction for better performance going forward. Fastener Products is targeting opportunities for additional aerospace share gains in the second half of this fiscal year.

"Going into the second quarter, we understood fully the challenges ahead of us, and we faced them head on," said Mark Donegan, chairman and chief executive officer of Precision Castparts Corp. "Year over year, the Company's aerospace orders were dropping 25 to 30 percent, while large commercial aircraft build rates basically held steady, and general industrial markets were hitting the bottom. Planned forge maintenance and seasonal European holidays also added to the top-line pressures. Given all of these challenges, our job was to focus on our operations, on our upside opportunities, on the factors that we could control - and to execute. Our employees refused to be victims to the sales line.