Albany International reports drop in first-quarter sales and earnings
NH firm’s aerospace industry customers reeling from Covid-19 fallout
The Covid-19 pandemic has taken a bite out of Albany International Corp.’s earnings, the Rochester, NH-based manufacturer of engineered components reported Wednesday.
The company, whose major customers are in the aerospace and defense industries, reported a 6.2% sales decline, to $235.8 million, in the first quarter that ended March 31. That compares to sales of $251.3 million in the same period a year earlier. Income followed suit, with gross profit in the quarter down 2.5%, to $89.5 million from $91.8 million a year ago.
Nevertheless, said Bill Higgins, the company’s CEO, “we are pleased with the performance of the business during the first quarter,” adding that the company is “focusing in the near-term on maintaining the health and safety of our workforce while fulfilling our commitments to our customers – particularly in our role as a supplier to industries considered essential to dealing with the Covid-19 response and essential to the U.S. defense industrial base.”
The earnings report came the same day that Boeing Co. and Airbus – two major Albany International customers – sent shivers through the industry after assessing the impact of
Boeing on Wednesday said it would cut its 160,000-person workforce by about 10%, further reduce 787 Dreamliner production and try to boost liquidity as it prepares for what it says will be a years-long industry recovery from the coronavirus pandemic that drove its second consecutive quarterly loss, this time amounting to $1.35 billion, with revenue coming in at $400 million below expectations.
Albany had already been feeling the effects of the continued grounding of Boeing’s 737 Max airliner, for which the company provides components for the plane’s LEAP-1B engine, manufactured by Safran Aerospace Composites.
Airbus, the European aircraft giant, also said on Wednesday that 60 of its aircraft could not be delivered in the first quarter, partly because the airlines that ordered them want to put off paying for them.
“We are now in the midst of the gravest crisis the aerospace industry has ever known, ” Airbus CEO Guillaume Faury said in a statement after the company reported a net loss of $522 million in the first quarter of 2020, a reversal from a profit of €40 million a year earlier.
Nevertheless, Albany’s Higgins stressed the company finished the quarter “in good financial health with a strong balance sheet, low leverage, and over $400 million of liquidity, adding that, “to manage through the turbulence caused in some of our end-markets, we will continue to assess the dynamics of the situation and make adjustments based on the best information we have.”