Precision Castparts Updates Q4 Guidance To Reflect Charges - Quick Facts

(RTTNews) - Precision Castparts Corp. (PCP) announced that following a review of its oil & gas and power pipe end markets and inventories, the company will recognize fourth-quarter charges for actions taken to rationalize certain assets and restructure operations. The company now expects fourth-quarter earnings per share from continuing operations to be in the range of $0.65 to $0.80, including charges which range from approximately $343 million to $363 million pre-tax, or $2.15 to $2.25 per share. Excluding the impairment and restructuring charges, adjusted earnings per share are expected to be $2.90 to $2.95.

The company will recognize a non-cash impairment charge in the range of $210 million to $220 million pre-tax related to its 50% ownership interest in Yangzhou Chengde Steel Tube Co., Ltd. (Chengde) as it pursues a sale of that stake. In addition, the company will recognize a non-cash inventory and other asset impairment charge in the range of $125 million to $135 million pre-tax, primarily in its oil & gas, power pipe and associated raw material operations, reflecting the more challenging market environment. The company implemented headcount reductions, which will result in a pre-tax charge of approximately $8 million in the fourth quarter.