Allegheny Technologies forecasts 3Q loss, lower sales
By John D. Oravecz
Published: Monday, Oct. 14, 2013, 10:27 a.m.
Allegheny Technologies Inc. on Monday said it expects a third-quarter loss, citing “challenging conditions,” caused by lower sales, higher raw materials prices, a failed stainless steel price increase and expenses from a restructuring of its engineered products segment.
The Downtown-based manufacturer of specialty steel and titanium expects a loss for the period of about 27 cents to 30 cents a share, including higher income taxes and a $9 million expense from the closing and planned sale of two small businesses. It expects three-month sales of about $970 million, down about 20 percent from the same period a year ago.
“As expected, challenging conditions continued during the third quarter,” said CEO Richard Harshman. “Jet engine destocking at (manufacturers), while beginning to show signs of stabilizing, continued to impact shipments of both mill products and forged and machined components in our high-performance metals segment.”
Global economic uncertainty affected demand for flat-rolled products, industrial titanium and nickel-based and specialty alloy sheet and plate products, Harshman said. A stainless steel price increase on Aug. 1 did not have a significant impact on improving profit in the quarter.
After a strategic review, ATI said it closed a fabricated components business in Bolingbrook, Ill., and intends to sell its iron casting business in Laporte, Ind., which were part of the engineered products segment. During the first half of 2013, the units had revenue of $10 million and a loss before taxes of $9 million. The restructuring follows ATI's announced sale of its tungsten materials business for $605 million to Kennametal Inc., expected to close in the fourth quarter.
A loss in the third-quarter would compare to a profit of $35.3 million, or 32 cents a share, on sales of $1.22 billion in the same period in 2012 and continues a downward trend in earnings and sales. In the same quarter in 2011, the company earned $62.3 million, or 56 cents, on sales of $1.34 billion.
In the second quarter of this year, ATI reported net income of $4.4 million, or 4 cents a share, compared with $56.4 million, or 50 cents a share, a year ago. Sales fell 16 percent to $1.14 billion versus $1.36 billion last year. In that report, Harshman said cost reduction and completing a $1.2 billion hot rolling mill at its Allegheny Ludlum Brackenridge Works in Harrison were top priorities.
ATI is scheduled to issue its full third-quarter earnings report on Oct. 23. Its stock closed down 10 cents at $30.82, recovering from an earlier fall to $29.49.
John D. Oravecz is a staff writer for Trib Total Media. He can be reached at 412-320-7882 or email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Wages have soared in Pittsburgh but economy appears to have stalled
- PPG shareholders vote against proposals; sales, profit see double-digit increases
- Consol Energy transitions as leadership changes hands
- Fed Beige Book survey: Growth picks up across most of U.S. but not in Pittsburgh region
- Region’s largest bank PNC posts 7% rise in 1Q profit
- Yellen stresses need for Fed to be flexible
- GlaxoSmithKline discloses bribery inquiries
- Higher fuel costs help established airlines, hinder startups
- Factory output extends solid gains in March
- Mt. Gox bankruptcy protection rejected
- Heinz offers Pittsburgh workers a buyout if they are unhappy