Ameron posts steep decline in 3rd-quarter profit

Ameron posts steep decline in 3rd-quarter income, citing falling demand at steel mill

• On 10:39 am EDT, Thursday September 24, 2009

PASADENA, Calif. (AP) -- Ameron International Corp., which makes water transmission lines and other products, posted another steep quarterly decline in profit Thursday, and for the same reason: falling demand for a key steel product.

However, the Pasadena, Calif., company still beat Wall Street estimates.

Ameron said net income for the third quarter was $5.9 million, or 65 cents per share, down 60 percent from $15 million, or $1.63 per share, in the same quarter last year.

Analysts surveyed by Thomson Reuters expected, on average, earnings of 59 cents per share on revenue of $142.9 million.

Revenue of $131.4 million for the quarter ended Aug. 30 was down 23 percent from $170.1 million in the year-ago period.

Ameron said earnings declined in large part due to lower earnings from TAMCO, the company's 50 percent-owned steel minimill in Southern California.

TAMCO has felt the impact of a significant decline in demand for steel rebar -- stainless steel reinforcing bars used in construction -- due to reduced public works and commercial construction spending in TAMCO's primary markets in Arizona, California and Nevada, Ameron said.

Ameron reported steep earnings declines in the first and second quarters, each time citing the falling demand for rebar produced by TAMCO.

TAMCO's third-quarter sales slid 78 percent year over year due to declines in infrastructure spending in the Western U.S., Ameron said. Selling prices and volumes were lower. The venture's loss for the third quarter was $700,000, compared with net income of $9.3 million in the third quarter of 2008, the company said. Ameron's share of TAMCO's net loss was $300,000 in the third quarter, compared with income of $4.2 million in the comparable period of 2008.

Shares fell 84 cents to $80.65 in morning trading.

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