Headwaters Inc (HW)

[Arrow335]

July 29 (Reuters) - Headwaters Inc (HW.N: Quote, Profile, Research, Stock Buzz) reported a 70 percent decline in quarterly profit, due to the expiration of some tax credits and the weakness in residential construction market, but managed to beat Wall Street expectations, helped by increased clean coal sales.

Net income for the third quarter fell to $13.7 million, or 31 cents a share, down from $46.4 million, or 98 cents a share, last year.

Total revenue fell 31 percent to $230.5 million.

Analysts polled by Reuters had, on average, expected earnings of 24 cents a share, before special items, on revenue of $229.1 million.

The supplier of building materials and coal combustion products, which had enjoyed tax benefits under Section 45k of the Internal Revenue Code for producing fuel from specified non-conventional sources, said the tax credits came to an end on Dec. 31, 2007.

Clean coal sales for the quarter rose to $13.1 million, compared to less than $0.5 million last year.

"The positive trend in clean coal sales and production will continue as we ramp up more facilities and take advantage of increases in coal prices later this calendar year." the company's Chief Executive Kirk Benson said in a statement.

The company based in South Jordan, Utah, continues to expect 2008 earnings of 60 cents to 75 cents a share. Analysts were expecting 60 cents a share.

Shares of the company, which have fallen more than 14 percent year-to-date, closed at $10.06 Monday on the New York Stock Exchange. (Reporting by Hezron Selvi in Bangalore; Editing by Amitha Rajan)

http://www.reuters.com/article/marketsNews/idINBNG10407220080729?rpc=44