Precision Castparts Third Quarter Fiscal 2015 Earnings

• Organic sales up 2 percent year over year, despite headwinds from an aerospace customer's inventory actions, year-end shipment deferrals, softening oil & gas markets, and extended equipment maintenance
• Sustained IGT growth, due to content expansion

PORTLAND, Ore., Jan. 22, 2015 (GLOBE NEWSWIRE) -- Precision Castparts Corp. (NYSE: PCP ) reported its results for the third quarter of fiscal 2015:

¹ Attributable to PCC

"Our third quarter performance included some clear achievements, but we also faced some real challenges in several of our end markets," said Mark Donegan, chairman and chief executive officer of Precision Castparts Corp. (PCC). "On the plus side, we made solid progress on our production and development aircraft and engines programs, growing 6 percent year over year. In addition, our 7 percent growth in industrial gas turbines outpaced the market, given our higher content on new and upgrade platforms, as well as providing a steady supply of spares to the installed base.

"On the other hand, we took longer than expected in performing an upgrade of a major forging press, which is now up and running and fully functional. In addition, some of our commercial aerospace customers with December year-ends deferred shipments to January. These deferred shipments will ship in the fourth quarter.

"The third quarter also presented us with some significant uncertainties with our oil & gas sales and with one of our large aerospace customers," Donegan said. "We experienced rapid declines in demand from our oil & gas customers, and we cannot predict when this market will recover. In addition, our visibility to this aerospace customer's schedules is limited, and further reductions may occur.

"Factoring in the uncertainties we are facing, we currently expect our FY15 EPS from continuing operations to be in the range of $12.80 to $12.90," Donegan said. "We will be initiating a formal annual guidance program with our Q4 earnings call in May. Our current outlook for FY16 is that our results will be below our previously stated EPS target range of $15.50 to $16.50, after including cash deployment to date. However, we expect that our FY16 EPS from continuing operations will demonstrate growth over FY15. We anticipate FY16 growth to be driven by effective leverage of IGT market share gains, aerospace build rate expansions, initial production of next-generation engines, and strong cash generation and deployment to acquisitions and share repurchases. Uncertainties that impact our FY15 and FY16 outlooks include military demand, customer inventory management, oil & gas demand and items such as currency and pension expense. A complete discussion of the impact of these dynamics will occur during our initial guidance presentation in May."

Segment Results

• Sales grew by 4 percent, driven primarily by increased commercial aerospace and industrial gas turbine (IGT) activity. Contractual pass-through pricing declined by $1 million year over year. Commercial aerospace sales increased by 2 percent due to strong positions on new and in-development commercial aircraft engine platforms. IGT sales improved by 10 percent, driven by the Company's higher content on upgrade programs and new production turbines, as well as growing spares demand. Regional/ business jet sales were higher, with military shipments essentially flat.
   
• The segment's operating income increased by 5 percent, and operating margins improved year over year from 35.8 percent to 36.2 percent, resulting from effective leverage of higher volumes.

• Sales improved by 2 percent, including a positive impact of approximately $10 million from alloy and revert selling prices, net of reductions in contractual pass-through pricing. Commercial aerospace sales grew by 1 percent; however, continued destocking at a single aerospace customer and late-quarter deferred shipments reduced the segment's aerospace growth by 7 percentage points. Power sales decreased by 5 percent, chiefly as the result of lower oil & gas demand late in the quarter and equipment maintenance.
   
• Operating income dropped by 7 percent, while operating margins fell 230 basis points to 23.2 percent as a result of lower power sales and higher general industrial sales.

• Sales grew by 11 percent, driven by 17 percent growth in commercial aerospace sales. Fastener operations continue to maintain a high level of activity to meet aerospace production schedules and to benefit from the rapid integration of the most recent acquisitions. Similarly, the aerostructures businesses saw further demand from its broad aerospace customer base, while ramping up production to support new contracts.
   
• Operating income grew by 12 percent, and operating margins increased from 29.9 percent to 30.2 percent, driven by solid leverage of increased throughput and the benefit from acquisitions.

Precision Castparts is hosting a conference call to discuss the above financial results today at 7:00 a.m. Pacific Time.

NOTE: The presentation charts are immediately available on the Company's web site:  http://www.precast.com/investors/presentations

Individuals interested in monitoring the webcast should paste the following address into their browser for access to the live conference link:

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Those interested in asking questions following the earnings presentation must dial in for audio access to (888) 397-5355, Access Code: 3250711. Dial *0 for technical assistance with dial-in access. In order to assure the conference begins in a timely manner, please dial in 10 to 15 minutes prior to the scheduled start time.

You may also gain access to the webcast through Precision Castparts Corp.'s corporate website:  http://www.precast.com/investors/presentations/

Following the conference call, you may replay the conference by calling (888) 203-1112 or (719) 457-0820; the replay pass code is 3250711.

Precision Castparts Corp. is a worldwide, diversified manufacturer of complex metal components and products. It serves the aerospace, power, and general industrial markets. PCC is a market leader in manufacturing large, complex structural investment castings, airfoil castings, forged components, aerostructures and highly engineered, critical fasteners for aerospace applications.  In addition, the Company is a leading producer of airfoil castings for the industrial gas turbine market.  PCC manufactures extruded seamless pipe, fittings, forgings, and clad products for power generation and oil & gas applications; commercial and military airframe aerostructures; and metal alloys and other materials to the casting, forging, and other industries.

Information included within this press release describing the projected growth and future results and events constitutes forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results in future periods may differ materially from the forward-looking statements because of a number of risks and uncertainties, including but not limited to fluctuations in the aerospace, power generation, and general industrial cycles; the relative success of our entry into new markets; competitive pricing; the financial viability of our significant customers; the concentration of a substantial portion of our business with a relatively small number of key customers; the impact on the Company of customer or supplier labor disputes; demand, timing and market acceptance of new commercial and military programs, and our ability to accelerate production levels to timely match order increases on new or existing programs; the availability and cost of energy, raw materials, supplies, and insurance; the cost of pension and postretirement medical benefits; equipment failures; product liability claims; cybersecurity threats; relations with our employees; our ability to manage our operating costs and to integrate acquired businesses in an effective manner, including the ability to realize expected synergies; the timing of new acquisitions; misappropriation of our intellectual property rights; governmental regulations and environmental matters; risks associated with international operations and world economies; the relative stability of certain foreign currencies; fluctuations in oil & gas prices and production; the impact of adverse weather conditions or natural disasters; the availability and cost of financing; implementation of new technologies and process improvements. Any forward-looking statements should be considered in light of these factors. We undertake no obligation to update any forward-looking information to reflect anticipated or unanticipated events or circumstances after the date of this document.

Precision Castparts Corp.'s press releases are available on the Internet at Globe Newswire's website - http://www.globenewswire.com or PCC's home page at http://www.precast.com . If you wish to be removed from this list, please reply to Unsubscribe@precastcorp.com .

Jay Khetani, Vice President of Investor Relations (503) 946-4700 Website: http://www.precast.com