Tag - Chp

C&D Technologies Inc. (NYSE:CHP) plunged nearly 19% after the company widely missed analysts’ estimates for its second-quarter earnings, despite swinging to a profit.

The Blue Bell, Pa.-based producer of electrical power storage and conversion products reported just after the market closed on Monday that it earned $1.2 million, of $0.05 per share, compared with a net loss of $3.1 million, of $0.12 per share, in the prior year second quarter.

Analysts polled by Thomson First Call on average were expecting earnings per share of $0.12 for the quarter ended July 31.

By mid-day, the stock was down $1.44 on unusually heavy volume to $6.25. Shares have ranged between $4.06 and $9.52 during the past 52 weeks.

For detailed price information and news stories on C&D Technologies, click CHP.

Small-cap stocks edged higher after a soft opening, underpinned by residual support from Monday’s big GSE-led rally, and by a slide in crude oil prices, which hit multi-month lows this morning. At 10:03 a.m. ET, the Russell 2000 (NYSE:IWM) was up 2.32, or 0.32% at 735.18.

Crude oil prices slumped some $2 dollars a barrel, slipping below $104 dollars this morning for the first time in five months, as weather watchers predicted Hurricane Ike would turn south away from the primary oil production area in the Gulf of Mexico. OPEC leaders meeting in Vienna today said that output was likely to stay at current levels. Elsewhere on the commodities front, grains are called lower, softs were lower (with orange juice down 8%) and gold slipped 2% at one point during European trading overnight. The dollar extended the move to fresh 11-month highs against the euro currency, which also weighed on commodities.

Treasury products were modestly higher this morning, which reflected investor demand for less risky fare, which is a potential worry sign for equities. If money flow starts to aggressively favor credit instruments, it could pull money away from stocks, but for now the trends are in balance.

Broad market sectors on the rise this morning included automobile manufacturers, food retail stocks, hotels, publishers, internet software services, motorcycle manufacturers and restaurants. On the downside, coal remains under significant pressure. Also, fertilizer, steel, oil exploration, gold, metals and mining stocks were all taking a hit.

Individual small-caps on the move were highlighted by Korn Ferry Intl. (NYSE:KFY), which was up 8% on earnings news. US Airways Group Inc. (NYSE:LCC) climbed 7% higher, bolstered by the pullback in energy prices. On the downside, . . .

The Russell 2000 (NYSE:IWM) fell as news of an unexpected decline in first-quarter profit at General Electric Co. (NYSE:GE) sparked a sell-off. The small-cap index let go 19.26 points, or 2.72%, to 688.16. The Dow Jones Industrial Average declined 256.56 points, or 2.04%, to 12,325.42.

On a year-to-date basis, the Russell 2000 has shed 10.17%, while the Dow has retreated 7.08% and the S&P 500 is down 9.23%.

Small caps opened lower and moved deeper into the red throughout the session following news before the start of trading that General Electric suffered an unexpected decline in first-quarter profit and lowered its full-year 2008 earnings guidance.

The Fairfield, Conn.-based company, which rarely misses analysts’ expectations, is considered an economic bellwether due to its size and reach.

Another indicator pointing to serious economic problems came after the start of trading when Reuters/University of Michigan reported that its index of consumer confidence fell to a worse-than-expected reading of 63.2 in April, the lowest level since 1982. In March the index came in at 69.5.

Among the small-cap losers today was C&D Technologies, Inc. (NYSE:CHP). The Blue Bell, Pa.-based maker of standby power systems reported after . . .

C&D Technologies, Inc. (NYSE:CHP) CEO Jeff Graves said the maker of standby power systems is on track to make a return to profitability this year, which is the firm’s fiscal year 2009. Graves made the comments during a morning conference call.

“We believe that, with the fundamental changes made last year in our price mechanisms and lead management strategies, these results can be delivered in spite of any unexpected turbulence in the lead commodity markets that has become a way of life in recent times,” Graves said in reference to C&D’s fourth-quarter loss, which was narrower than a year earlier.

After Thursday’s closing, C&D reported a fourth-quarter loss of $10.3 million, or $0.40 per share, compared with a loss of $14.3 million, or $0.55 per share, a year earlier. Wall Street analysts, on average, expected a loss of $0.10 per share.

“2008 was very much a transition year for C&D Technologies and we accomplished a great deal,” Graves said. “We made a number of difficult decisions, but . . .

During a morning conference call, executives of C&D Technologies, Inc. (NYSE: CHP), a maker of electrical power storage and conversion systems, said the firm is ahead of schedule in meeting cost savings targets, despite dramatic cost increases.

“I’m pleased with the way we held our ground by focusing on our key cost and pricing initiatives and the further promising developments of the second quarter,” CEO Jeffrey Graves said during the call. “Our core business remained very profitable in spite of the rising lead cost.”

The per-pound price of lead, which is used in the company’s power storage products, increased 50% over the last three months, he said.

Graves said the company is ahead of schedule in meeting cost initiatives. During the second quarter, C&D achieved $4 million in costs savings through freight pricing, non-lead sourcing activities, product redesign and plant process improvements, he said. The progress puts the company on schedule to achieve $15 million in costs savings for fiscal 2007 ending January 31. The firm also expects to achieve $30 million in cost savings during fiscal 2008.

Even though the firm’s cost reductions are running ahead of schedule, the CEO said analysts should not expect the company to achieve greater-than-planned savings. Because of volatility in the commodities market, volume dependence and variable costs, he said investors and analysts should “stick to the number.”
 
To achieve savings, C&D is renegotiating fixed price contracts.

“This is obviously a difficult conversation to have but our customers are supportive and we’re making substantial progress,” Graves said.

The firm is also adding lead clauses into contracts or including a lead surcharge.

“Keep in mind that with either mechanism, there’s a lag between when the costs change and when the new pricing levels take effect,” he said.

After Friday’s closing bell, Blue Bell, Pa.-based C&D reported a net loss of $3.1 million, or $0.12 per share, for the second quarter ended July 31, better than Wall Street estimates of a $0.23 loss per share and better than the net loss of $3.6 million, or $0.14 per share, recorded a year earlier. C&D’s quarterly consolidated revenue was $135.7 million, above analyst projections of $132.7 million and above revenue of $132.4 million in the year-ago period.

The firm’s cost of sales during the period was $80.6 million, up from $70.6 million a year earlier. Selling, general and administrative expenses increased to $12.3 million from $11.6 million during the same period of calendar 2006.

C&D’s quarterly results reflect its Power Electronics Division as a discontinued operation. On August 31, C&D sold the division to Japan-based Murata Manufacturing Co., Ltd. (TYO: 6981) for $85 million in cash. The proceeds were used to repay C&D’s revolving line of credit, Graves said.

The chief executive said C&D now has $85 million in liquid assets - $40 million cash and $45 million in credit – which will be used to fund capital expenditures aimed to restructure the company, cut costs, handle the volatile commodities market and support growth opportunities.

In terms of growth, Graves said the company has two main options – either organic growth or international development. Organically, he said “customers want to buy more products than we can provide them.” To meet this need, he said the company may aggressively pursue research and development activity to meet customer demand. He said the company already has the investments in place to generate organic growth.

C&D may also invest in growth in China and India, he said.