IMCO Recycling Inc. revised upward management's guidance for its second quarter 2003 financial results, saying it now expects net earnings in the period to come in "significantly above" the $1.3 million earned in the first quarter of the year.
The company previously had said that it expected its second quarter net earnings to be "somewhat improved" from those of the first quarter.
Don Ingram, chairman and CEO, said IMCO Recycling's net earnings in the current period "could equal or exceed the $2.5 million earned in the second quarter of 2002. We are benefiting from the recent major expansion of our international operations, particularly our full ownership of VAW-IMCO of Germany, formerly a joint venture. VAW-IMCO's processing volume and margins are exceeding earlier expectations. In addition, volume is increasing at our Mexican plant that was upgraded in 2002."
In March 2003 IMCO Recycling signed an agreement that finalized the redemption value for the shares in VAW-IMCO held by a partner. This agreement resulted in VAW-IMCO becoming a consolidated subsidiary of IMCO Recycling, effective March 1, 2003.
The company previously reported VAW-IMCO's financial results under the equity method of accounting which recorded only IMCO Recycling's 50 percent share of VAW-IMCO's after-tax earnings.
Ingram said he does not foresee improvement in the current quarter in results from the company's domestic aluminum and zinc segments. "Our specialty alloys facilities that supply vehicle producers and their component manufacturers are performing well, but volume at our U.S. aluminum recycling plants is well below capacity due in part to the continuing weakness in the industrial sector of the U.S. economy. Our zinc operations are also being affected by the low level of domestic manufacturing activity."