The plunge in oil prices continues to rattle Graham Corp.
The Batavia manufacturer said its second-quarter profits were cut by more than half as softness in the company’s refining and petrochemical markets caused its sales to tumble by 36 percent. But the company’s reduced profits still were better than analysts were expecting.
With oil prices at their lowest levels in six years, Graham’s customers in the refining industry have been cutting back on projects to upgrade their facilities. During the summer, one customer canceled a $3.9 million order and it booked nearly $9 million less in new orders from the refining industry than it did a year ago.
James R. Lines, Graham’s CEO, said the company continues to see “strong fundamentals” in its energy and petrochemical markets over the long term, and has been helped by investments the company has made over the last few years to improve its productivity.
Graham’s profits fell by 53 percent to $2 million, or 20 cents per share, from $4.2 million, or 41 cents per share, a year ago. Analysts were expecting the company to earn 13 cents per share.
Sales during the quarter fell to $22.8 million from $35.6 million a year ago, with revenues from refining projects dropping by 36 percent and petrochemical sales falling by 12 percent. Revenues from the power generation market fell by 34 percent.
Graham said it expects its sales this year to range between $95 million and $105 million, which would be down about 26 percent from last year but is in line with analyst forecasts of $100 million.
Graham’s stock has fallen by 39 percent since the beginning of the year. The shares closed at $17.46 on Tuesday.