Allegheny Technologies expects better year in 2013
Allegheny Technologies Inc. said its fourth-quarter profit fell by two-thirds from a year ago as customers kept inventories slim in the midst of a tough economy — but it's expecting a better 2013.
Downtown-based ATI reported net income on Wednesday of $10.5 million, or 10 cents a share, down from $31.7 million, or 29 cents, in the same quarter a year ago.
The specialty metals maker's latest financials included an $8.8 million special charge, equaling 8 cents a share, related to closing an iron casting plant in Alpena, Mich., and other consolidation expenses.
ATI bought the former automotive plant in 2007 and turned it into a plant that could make large castings for wind turbines and other products.
“The wind energy market and other markets for large iron castings have been challenging for several years both due to reduced demand and excess global capacity,” such as from China, CEO Rich Harshman said during a conference call with analysts.
He added the company is consolidating service centers for flat-rolled steel into one location to cut costs.
Sales were $1.1 billion, down 12 percent from $1.25 billion a year ago. ATI shares closed at $30.85 yesterday, up 28 cents. The stock traded in the $50 range a year ago.
Harshman said ATI's key global markets — including aerospace, oil and gas exploration and medical — likely will grow in the next three to five years.
Construction of a new $1.1 billion hot-rolling and processing facility at ATI's Brackenridge plant is on schedule and on budget, and is to be completed by the end of 2013, he said.
This should be ATI's peak year for capital expenses, Harshman said, with a total $550 million budgeted including $450 million for the Brackenridge project that promises to cut costs and production times while providing longer and wider stainless coils.
He called the hot-rolling facility a “game-changing technology” that, combined with other equipment, comprises a continuous automated finishing line that takes about 30 minutes to turn a hot-rolled coil into a finished coil. That compares to about two weeks at most stainless finishing facilities, Harshman said.
ATI is funding the hot-rolling mill with cash on hand, cash flow and money from an existing credit facility if needed.
Asked by an analyst about his forecast for “moderate growth” in revenue, Harshman declined to state a number. “It's growth. It's not zero, it's not down, but it's certainly in the single-digit range,” he said.
ATI's full-year 2012 profit was $158.4 million, or $1.97 a share, down 26 percent from the prior year. Sales for the year dipped to $5.03 billion, from $5.18 billion.
Kim Leonard is a staff writer for Trib Total Media. She can be reached at 412-380-5606 or email@example.com.