1:00PM New York – Mueller Water Products earnings declined 70% on revenue loss of 10%.

Mueller Water Products, Inc, a manufacturer of a range of water infrastructure and flow control products said net sales for the 2008 second quarter declined 10% to $421.6 million compared to $459.7 million for a year ago.

Net income of $5.7 million, or $0.05 per diluted share, in its second quarter ended March 31, 2008 compared to net income of $17.9 million or earnings per share of $0.16 in the 2007 second quarter.

Net debt as of March 31, 2008 was $978.2 million compared with $1,059.2 million as of March 31, 2007.

Net sales for the Mueller Co. segment were $168.9 million in the 2008 second quarter compared to $195.9 million in the 2007 second quarter. Net sales declined primarily due to reduced volume of $31.7 million, partially offset by higher pricing and favorable Canadian currency exchange rates.

Net sales for the U.S. pipe segment were $114.2 million in the second quarter compared to $129.7 million in the 2007 second quarter primarily as a result of lower ductile iron pipe shipments.

Net sales for the Anvil segment were $138.5 million in the 2008 second quarter compared to $134.1 million in the 2007 second quarter. This increase was driven primarily by the favorable impact of Canadian currency exchange rates and higher sales pricing. Income from operations of $12.9 million and EBITDA of $17.9 million in the 2008 second quarter compare to income from operations of $13.6 million and EBITDA of $19.3 million in the 2007 second quarter.

Interest expense, net of interest income, was $18.1 million in the 2008 second quarter compared to $21.1 million in the 2007 second quarter.

The effective income tax rate was 42.4% in the 2008 second quarter compared to 43.7% in the 2007 second quarter.

Gregory E. Hyland, chairman, president and chief executive officer said, “We believe we are taking the right steps operationally to deal with these factors, by reducing both fixed and variable costs to address declines in volumes, and implementing price increases to help counteract rising raw material costs. Our second quarter results reflect the current condition of residential construction, rising raw material costs and the general uncertainty of the economy”.

Mueller Water stock (MWA: chart) rose 15 cents to $8.08 and has declined from $19.35 in the last twelve months of trading.