COSTA MESA, Calif. (AP) -- Ceradyne's profit sank 84 percent in the first quarter as shipments of its ceramic solar power components declined.
The results fell well short of Wall Street expectations, and Ceradyne's stock tumbled 14 percent in afternoon trading.
New orders tumbled to $80.8 million, down from $231.7 million in the prior-year period, and the company blamed huge inventories held by Chinese solar companies.
Ceradyne reported net income of $3.8 million, or 16 cents a share, in the three months ended March 31. That compares with net income of $23.6 million, or 94 cents a share, in the same period last year.
Revenue declined to $106.3 million from $150.1 million a year earlier.
Analysts' consensus forecast called for a profit of 37 cents a share on revenue of $120.1 million, according to FactSet.
The company ended the quarter with an order backlog valued at $259.5 million, down from $267.4 million a year earlier.
Ceradyne said shipments the company's ceramic crucibles, which are used in the manufacture of solar energy modules, fell to less than 20 percent of what they were in the first quarter last year.
"We believe the problem is the significant over capacity and excessive inventory build by our customers, the Chinese solar module manufacturers," said Joel P. Moskowitz, Ceradyne's president, CEO and chairman.
Moskowitz expects demand for Ceradyne's ceramic crucibles will improve gradually later this year as customers work off their inventory of silicon wafers and require crucibles to make more modules.
The executive said the company's financial performance will improve for the balance of the year starting with the current quarter.
However, Ceradyne lowered its full-year earnings and revenue guidance based on the first quarter.
The company now anticipates revenue will range from $540 million to $565 million, down from an earlier forecast range of $590 million to $625 million. It expects earnings per share to range between $1.40 and $1.65. It had previously estimated 2012 earnings per share would be between $2.30 and $2.65.
Analysts were anticipating full-year earnings per share of $3.30, on revenue of $572 million.
Shares of Ceradyne Inc. fell $4.38, or 14 percent, to $26.75 in afternoon trading.