Commonwealth Sees Another Tough Quarter

Executives from Commonwealth Industries Inc., Louisville, Ky., are warning of another tough quarter ahead for the publicly traded company.

In a news release, the company has stated that “weak customer demand continues to affect the company’s markets for aluminum products. As in the first quarter, these soft market conditions are expected to result in significantly lower net sales for the quarter ending June 30 compared with the same period last year.”

Basing its projections on results through the end of May, Commonwealth is forecasting a decline in sales of up to 25% compared to the second quarter of 2000, with the company incurring a second quarter loss of from 27 cents to 30 cents per share.

“Because of the largely fixed nature of the company’s manufacturing expenses, the ongoing decline in shipment volume continues to have an adverse impact on manufacturing efficiency, leading to higher unit costs,” the company’s news release notes.

Commonwealth, a major consumer of scrap aluminum at its facilities in Ohio, Kentucky and California, also points to “structural constraints on scrap aluminum supplies” as another factor affecting its profit margins for the quarter in progress.