Gibraltar Industries' year is getting off to an even worse start than company executives expected, but they said Tuesday that they expect steady improvement through the rest of 2007.
Gibraltar, which warned in February that its first quarter would be weaker than analysts then were predicting, further lowered its earnings forecast for the quarter because of a weaker-than-expected housing market and bad weather.
The Hamburg-based steel and metal building products manufacturer said it now expects to earn between 20 cents per share and 22 cents per share during the quarter that ended in March, down from its already-reduced forecast of 23 cents to 27 cents.
The announcement, coming on the heels of a 71 percent plunge in the company's fourth-quarter earnings, pushed Gibraltar's stock down by nearly 3 percent, or 65 cents, to $22.51. The shares are down 4.3 percent this year.
Gibraltar executives blamed the weaker profits and a roughly 1.6 percent drop in sales during the first quarter on the slumping housing market and bad weather, especially in its markets in the Midwest and Northeast.
That pushed revenues from Gibraltar's building products business, which accounts for about two-thirds of the company's sales, down by about 3.5 percent during the first quarter.
Gibraltar executives said a 20 percent drop in the general building market was partially offset by the company's recent acquisitions and the continued strength in its commercial and industrial construction products field.
Sales in Gibraltar's processed metals group grew by about 3.2 percent during the first quarter, despite continued weakness in its automotive markets.
Brian J. Lipke, Gibraltar's chairman and chief executive officer, said he believes the company bottomed out during March and should see gradual improvement as the year progresses.
"Our business began to improve in the second half of March, a pattern which is continuing into the second quarter," he said. "We expect our results will improve considerably in the second quarter over the first," with gradual improvement in the business environment as the year goes on.
In response to its softening markets, Gibraltar is taking steps to improve the company's long-term performance, said Henning N. Kornbrekke, the company's president and chief operating officer. The company is in the process of closing its processed metals plant on Military Road in Kenmore in a move that will eliminate about 90 local jobs.