Sign up
Tech Capital

Northern Technologies International shares slip after CEO says fiscal 1Q performance hit by US-China trade spat

The rust and corrosion prevention company’s sales in China were “softer than anticipated” during the fiscal first quarter
China flag
Looking ahead, the Minnesota company still expects full-year earnings to be $2 to $2.10 per share

Shares of Northern Technologies International Corp (NASDAQ:NTIC) slipped Tuesday after the rust and corrosion prevention company posted a fiscal first-quarter profit of $1.5 million.

In a statement, CEO Patrick Lynch said the company’s sales in China were “softer than anticipated” during the fiscal first quarter due to concerns about the trade dispute between the US and China.

READ: EARLY MOVERS - Union Pacific stock rolls higher, while Tesla shares also accelerate on news of Ellison stake

But Lynch expects the trend will improve in fiscal 2019 and the company still expects full-year earnings to be $2 to $2.10 per share, with revenue in the range of $60 million to $61.5 million.

“While macro-related issues, such as the continued concern over global trade, have caused certain customers to act more cautiously, we continue to believe our global footprint and diverse product offerings provide NTIC with significant flexibility to withstand evolving market dynamics,” Lynch said in a statement.

The company, which is based in Circle Pines, Minnesota, reported net income of $0.32 per share on revenue of $14.1 million in the three months ending on November 30.

The increase in revenue stemmed largely from a jump in sales of ZERUST oil and gas products, corrosion prevention products for the oil and gas industry, and sales of Nature-Tec products, a portfolio of biodegradable polymer resins, the company said.

Quarterly sales of ZERUST corrosion prevention products rose 71% to $10.1 million from the year-ago quarter while Nature-Tec sales came in 28% higher over the same period at $4 million.

At the close of November, Northern Technologies was sitting on working capital of $24.17 million and had no debt.

Northern Technologies shares shed 5.6% to hit $28.55 in Tuesday’s morning trading session.

Contact Ellen Kelleher at [email protected]

Register here to be notified of future NTIC Company articles
View full NTIC profile View Profile
View All

Related Articles

© tech Capital 2019

Tech Capital, a subsidiary of Proactive Investors, acts as the vanguard for listed tech companies to interact with institutional and highly capitalised investors.
Headquartered in London, Tech Capital is led by a team of Europe's leading analysts and journalists, publishing daily content, covering all key movements in the Technology market.