Shares of Titanium Metals Corp. jumped Wednesday, a day after the company reported first-quarter profit fell 46 percent but still met analyst expectations.
Shares jumped $2.53, or 16 percent, to $18.37 in midday trading.
The Dallas company blamed its declining earnings on a global titanium capacity increase and delays by Boeing in buying products for its 787 plane. Net income for the three months ended March 31 declined to $40.3 million, or 22 cents per share, from $75 million, or 41 cents per share. Revenue fell to $293.7 million from $341.7 million.
On average, analyst surveyed by Thomson Financial forecast a quarterly profit of 22 cents per share and revenue of $294.2 million.
Titanium Metals said increases in global titanium sponge capacity and manufacturing activity for titanium products increased availability of titanium sponge and scrap. That, in turn, cut costs for such raw materials, which then produced lower selling prices.
"Recently announced changes in the production schedule for the Boeing 787 Dreamliner are expected to impact customer inventory levels and product mix and contribute to additional fluctuations in demand over the near term," the company said in a statement.
Citi Investment Research analyst Brian Yu said pricing was better than he expected and that the company's prospects were bright.
"(The company) appears well positioned to benefit from continuing growth in (titanium) demand from the commercial aerospace market, even though the growth profile is more gradual than previously expected," Yu wrote.
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