Justice Sirikah

Zoltek Companies, Inc. (NASDAQ: ZOLT) Posts Low Third Quarter Profit On Global Economic Severity

by Justice Sirikah February 10, 2009

  Besides the usual influence of year-end and seasonal variations within the wind energy sector, Zoltek Companies, Inc. (NASDAQ: ZOLT ) said its dismal first quarter profit is also attributable to a series of cancellation and delay of orders by some of its customers, in the wake of the world-wide economic turbulence. This accounted for an increase of inventories, particularly finished products awaiting shipment – from $45.7 million on September 30, 2008, to $53.2 million by December 31, 2008.zolt_logo.png

  Gamesa, Zoltek’s second largest wind turbine customer after Vestas Wind Systems (OTO: VWSYF ), ironically dealt the heaviest blow on the company’s negative sales as it terminated operations at its manufacturing plants in December.

  However, Zoltek remains optimistic that fiscal year 2009 in its entirety could see continued growth in demand for wind energy accessories from both existing and prospective customers. Zsolt Rumy, the firm’s Chairman and Chief Executive Officer said although the “business is not immune to the global economic downturn, as well as the effects of currency fluctuations and extreme variations in cost of energy and raw materials, there is no evidence of change in the long-term demand from commercial applications for low-cost carbon fibres”.

  The financial results for the maiden quarter of 2009 fiscal year released on February 9 by Zoltek shows an 80% decline in profit. Net income was reported at $0.5 million ($0.02 per share), versus $2.6 million ($0.08 per share) in the corresponding period of last year.

  Net sales for the quarter tumbled by 3.6 percent to a total of $38.6 million, in relation to $40.1 million in the first quarter of financial year 2008. $3.5 million in operating income from continuing operations was accounted for the first quarter 2009, in comparison to net income of $2.6 million posted in the same financial period of fiscal 2008.

  Meanwhile, in the morning’s trading, Zoltek’s stock had endured a 15.84 percent beating and was trading at $7.28, from a closing price of $8.65 the previous day.
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  Resources:

1. http://www.zoltek.com/
2. Zoltek Companies, Inc. (NASDAQ: ZOLT) message board on HotStocked
 

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