Kokomo-based Haynes International Inc. (Nasdaq GM: HAYN) is reporting fiscal first quarter net income of $3.3 million, compared to a net loss of $1.6 million during the same period a year ago. But it could get rocky in the months ahead due to the grounding of the Boeing 737 Max jet.
“Looking forward, we see short-term challenges in the aerospace market, which are expected to impact our fiscal 2020 shipments,” said Michael Shor, president and chief executive officer.
Shor says the company expects a continuation of the reduced demand into the second quarter of fiscal year 2020 due to the uncertainty surrounding the Boeing 737 MAX production.
After two Boeing 737 MAX 8 aircraft crashed in 2018 and 2019, killing 346 people, aviation authorities around the world grounded the aircraft series.
In December, Boeing announced it would suspend production of the Boeing 737 MAX beginning in January 2020. According to Boeing.com, the company expects the 737 Max to be ungrounded in mid-2020.
Despite the challenges with Boeing, Shor believes Haynes is managing the issues and he’s optimistic about its other sectors. In addition to aerospace, the company also produces alloy elements for the industrial gas turbine and chemical processing industries.
“Our team is managing through this period of lower demand, and we believe that we will continue to show positive operational momentum stemming from the impact of our improvement initiatives.”
According to company guidance, Haynes International expects revenue in the second quarter of fiscal 2020 to be lower than the prior year second quarter of fiscal 2019, however earnings are expected to be higher than last year.
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