OCTG
Northwest Pipe earnings decline in Q4, FY2023
Written by Ethan Bernard
March 4, 2024
Northwest Pipe Co.
Fourth quarter ended Dec. 31 | 2023 | 2022 | % Change |
---|---|---|---|
Net sales | $110.2 | $106.8 | 3.1% |
Net earnings | $5.4 | $8.0 | -31.6% |
Per diluted share | $0.54 | $0.79 | -31.6% |
Twelve months ended Dec. 31 | |||
Net sales | $444.4 | $457.7 | -2.9% |
Net earnings | $21.1 | $31.1 | 32.4% |
Per diluted share | $2.09 | $3.11 | -32.8% |
Northwest Pipe posted lower earnings in the fourth quarter as the company said it faced “significant challenges” in its engineered steel pressure pipe (SPP) and precast businesses in full-year 2023.
The Vancouver, Wash.-based pipe producer reported net income of $5.4 million in Q4’23, down 31.6% from $8.0 million a year earlier on net sales that increased 3.1% to $110.2 million.
However, for full-year 2023, net sales slipped 2.9% to $444.4 million. (See table above.)
“Despite the challenging circumstances of 2023, we generated annual net sales of $444.4 million, down only moderately from 2022,” Scott Montross, president and CEO, said in a statement on Monday.
He noted that the SPP business “had one of the smallest bidding volume periods we have seen in many years, and the precast business continued to be suppressed by the interest rate environment throughout 2023.”
SPP, precast segments
The SPP segment had net sales of $75.1 million in Q4 vs. $72.1 million a year earlier, which the company said was driven by a 2% increase in tons produced. That gain resulted from changes in project timing and a 2% increase in selling price per ton primarily, the company said.
The precast business reported $35.1 million in net sales in Q4, up from $34.7 million in the same period a year earlier. Northwest Pipe cited “a 25% increase in volume shipped due to product mix, partially offset by a 19% decrease in selling prices due to both product mix and decreased demand.”
Outlook
Looking ahead, Montross said the company anticipates a significantly stronger bidding year in 2024 for its SPP segment. But he added that “typical seasonality” and “severe weather conditions that have led to unscheduled downtime time at several facilities” would impact Q1’24 net sales.
Therefore, he said, “first-quarter SPP net sales are expected to decline compared to the fourth quarter of 2023, but expected to remain well above first quarter 2023 levels.”
Montross noted that sever weather also caused “unscheduled downtime in our precast facilities, further suppressing the already seasonally slow first quarter.”
“We expect precast net sales in the first quarter to be similar to the same quarter last year with near-term margins remaining compressed,” he said.
Ethan Bernard
Read more from Ethan BernardLatest in OCTG
Active rig count update through mid-May
Drilling activity ticked up in the US but declined in Canada during the week ended May 17, according to the latest release from Baker Hughes.
Active rig counts mixed entering May
Drilling activity declined in the US but increased in Canada, according to the latest data from Baker Hughes.
Active rig counts slip in US and Canada
The number of active rigs in the US is now at the lowest level seen in over two years, while Canadian rigs have fallen to a four-month low.
Active rig count rises in US, falls in Canada
Drilling activity increased in the US but declined in Canada, according to the latest data from Baker Hughes.
Rig count falls in US, rises in Canada
Drilling activity decreased in the US but rose in Canada in the week ended April 12, according to the latest data from Baker Hughes.