GrafTech International announces Q4 2010 outlook

Nov. 1, 2010 - Based on International Monetary Fund projections and other economic reports, global economies continue to recover, to varying degrees, however downside risks remain high. The fragility of the global economic recovery remains a concern in both advanced and emerging economies.
According to the World Steel Association and other industry sources, global steel operating rates have fallen steadily since the second quarter of 2010 and are not anticipated to improve significantly in the near term. As a result, electric arc furnace steel end market demand is expected to ease in the fourth quarter of 2010.
Mr Craig Shular CEO of GrafTech said that "Our third quarter 2010 results came in stronger than anticipated as a result of favorable currency movement, the timing of shipments in our refractories business and a lower tax rate. For the fourth quarter of 2010, we expect graphite electrode sales volumes to be flat to down from the third quarter in response to the subdued operating rates of our customers. Sales in our Engineered Solutions segment are anticipated to remain solid as demand in key end markets such as solar, oil and gas exploration and electronics continues to improve. In aggregate, as a result of softening steel operating rates, our expectation is that operating income in the fourth quarter of 2010 will decline slightly as compared to the third quarter."
Based on IMF projections and other economic forecasts described above, GrafTech would expect the following targeted results in 2010, excluding any impact from the announced acquisitions of Seadrift and C/G and related customary transaction costs:
Operating income in the range of USD 175 million to USD 180 million (previous guidance was USD 170 million to USD 180 million)
Overhead expense (selling and administrative and research and development expenses) in the range of USD 110 million to USD 112 million (previous guidance was USD 105 million to USD 110 million)
Capital expenditures of approximately USD 75 million to USD 80 million
Depreciation expense of approximately USD 40 million (previous guidance was USD 38 million)
An effective tax rate in the range of 21% to 23% (previous guidance was 23% to 25%)
Cash flow from operations in the range of USD 100 million to USD 110 million