'Challenging business conditions' slice into ATI profits
The parent company of ATI-Allegheny Ludlum projects sharply lower profit for the first quarter compared to a year ago.
Allegheny Technologies Inc. blamed record-low selling prices caused by low-priced imports and weak demand in a variety of products.
ATI subsidiary Allegheny Ludlum is one of the Alle-Kiski Valley's largest employers.
The company said Tuesday that first-quarter net income will fall to about $10 million, or 9 cents a share, on sales of $1.18 billion.
A year ago, the Pittsburgh-based specialty steelmaker reported first-quarter net income of $56.2 million, or 50 cents a share, on revenue of $1.35 billion.
“As we stated in January, we expected challenging business conditions in the first quarter,” said CEO Richard Harshman.
Falling raw materials prices hurt sales and operating income as many customers postponed purchases to keep inventories low, the company said. That increased ATI's own inventory costs and reduced production.
Long term: New mill in Harrison key
In the long term, Harshman said market conditions are favorable for the company's key markets — aerospace, the oil, gas and chemical process industry, electrical energy, and medical.
“We also expect significantly improved operating performance in our flat-rolled products segment,” Harshman said, when the company's new $1.1 billion hot-rolling mill is completed in Harrison by the end of the year. Commissioning of the mill is expected in the first half of 2014.
ATI is scheduled to issue final results for the quarter on April 24.
John D. Oravecz is a staff writer for Trib Total Media.