Metals maker sets loss at $7.5M
Allegheny Technologies Inc. on Wednesday reported a third-quarter loss of $7.5 million on lower sales, contending that business conditions remain difficult and uncertain.
Despite the inclement economic climate, the company said operating income in its flat-rolled segment improved by nearly $10 million compared to the same period last year, primarily due to cost reductions.
The Pittsburgh-based stainless steel and alloy metals manufacturer said the third quarter was equal to 9 cents a share on sales of $469.3 million, down from $537.7 million in the same period last year. Net income in the same year-ago quarter was $8 million, or 10 cents a share.
"We see the potential for further weakening in the economy during the fourth quarter. This economy is not giving customers an easy ride, but we have the financial liquidity to ride it out and take us through this environment," James Murdy, Allegheny Technologies' president and chief executive, said yesterday during a conference call with securities analysts.
Allegheny Technologies stock closed yesterday at $6.75, down 25 cents a share.
Yesterday, Allegheny Technologies said third-quarter results include special charges of $4.5 million, or 5 cents a share. The bulk of the special charges, or $3.4 million, resulted from previously announced work force reductions. In July, the company announced plans to cut about 275 salaried positions companywide.
Last month, the company announced plans to spend $35 million to install a pair of electric arc furnaces at Allegheny Ludlum's melt shop in Brackenridge — an investment that is expected to improve competitiveness through annual cost reductions of $20 million.
"These are solid, hard, bottom-line cost reductions. It will give us a fully competitive melt shop going down the road and will also increase capacity by around 10 percent," said Doug Kittenbrink, executive vice president and chief operating officer of Allegheny Technologies.
Company officials anticipate the upgrade will cut more than 50 jobs. Hourly workers at Brackenridge are represented by Local 1196 of the United Steelworkers, which has about 1,484 members at the Brackenridge plant.
Allegheny Technologies, which employs about 10,700 people worldwide, is the parent company of Allegheny Ludlum.
Allegheny Ludlum employs about 4,500 people in melting and finishing shops in Brackenridge and Natrona in Allegheny County, and in Vandergrift, West Leechburg, Bagdad (near Leechburg) and a melt shop in Latrobe in Westmoreland County. The company also operates a plate-finishing plant in Washington and the Steckel Mill in Houston, both in Washington County.