Luxfer sees Q3 adjusted EPS about 12c below Q1, Q2 results, consensus 26c
Luxfer Chief Executive Brian Purves commented: "Demand has softened in a number of our markets, and defense in particular is below our prior view. As a result of the softening, there is near-term downside, particularly to sales of our magnesium products, and this will affect the Company's results. We currently expect Q3 Adjusted EPS to be approximately 12c below the results for Q1 and Q2 this year. We must assume that the current weakness in defense-related markets will persist at least until the end of 2016, and we have temporarily closed one magnesium powder facility and laid off employees at another of our magnesium business units." Purves added that the defense customer's unexpected outage at the end of May has lasted longer than anticipated, and other customers are reporting unusually low requirements for our magnesium-based products over the next few months, with normal demand for magnesium powder not expected to recover before Q1 2017. Purves continued, "We are working on several substantial commercial opportunities for magnesium products that we anticipate will help offset the weakness in some traditional markets. However, these opportunities are not yet firm as to size and timing. At this point, we believe the current low level of orders for magnesium products to be temporary, driven by near-term budgetary and other issues impacting our products more than in prior periods. The view that defense-related magnesium orders are temporarily delayed is supported by the recent award of a large contract for flare production by the U.S. military for 2017 production where we will be the powder supplier."