Lower earnings from its motion control equipment business, coupled with a doubling of its loss from its cutlery unit, caused Servotronics Inc.'s third-quarter profits to fall by 51 percent, the Elma-based manufacturer said.
Servotronics said its profits fell to $366,000, or 16 cents per share, from $744,000, or 34 cents per share, a year ago. The company's stock, which topped $12 as recently as late August, fell by 6 percent in early trading Monday to $9.01.
The company's sales fell by 3 percent to $9.5 million from $9.7 million as higher sales of its motion control equipment were offset by lower knife sales.
Lower revenues from both its commercial and military clients led to an 18 percent drop in cutlery sales to $1.8 million. That caused operating losses from the company's cutlery business to more than double to $206,000 from a loss of $94,000 a year ago.
"We continue to work on improving our operations and cost structure at our consumer products group and expect to be positioned to win new business opportunities in the future," said Kenneth D. Trbovich, Servotronics' president, in a statement.
The company's Advanced Technology Group was hurt by rising expenses, which increased by 4 percent during the quarter as the company over the past year has added 20 people to its work force, which now totals 317 workers, as the business increased its production capacity to accommodate the 23 percent rise in purchase orders received during the first nine months of this year.
Motion control equipment sales grew by 2 percent during the quarter to $7.7 million, but the rising costs led to a 32 percent drop in operating profits to $572,000.