DOW JONES NEWSWIRES
Allegheny Technologies Inc.'s (ATI) third-quarter profit fell
29% on inventory charges related to increased nickel prices while
revenue topped analysts' expectations.
The metal processor, which makes products for aerospace and
petrochemical industries, has seen results improve the past two
quarters. But it said two weeks ago it expected to report
third-quarter earnings below expectations due to steel-price
increases and slowed volume growth as some clients started to
destock.
Chairman and Chief Executive L. Patrick Hassey said Tuesday the
company is also "cautiously optimistic that demand for our standard
sheet and plate products will continue to recover."
Allegheny reported a third-quarter profit of $1 million, down
from $1.4 million, a year earlier, with results flat on a per-share
basis at 1 cent. The latest period included a 21-cent inventory
charge related to increased nickel prices and 4 cents of tax
charges. The company in October predicted earnings of 5 cents, well
below analysts' then-estimate.
Revenue surged 52% to $1.06 billion. Analysts had most recently
estimated $984 million.
Gross margin narrowed to 8.5% from 13.5% amid the higher
costs.
Revenue in Allegheny's flat-rolled products segment, its biggest
by revenue and which makes stainless-steel sheets, surged 70% on
29% volume growth while the segment swung to a loss due to the
nickel price increases. Revenue from the high-performance metal
segment, which makes titanium- and nickel-based alloys, increased
23% and profit jumped 40%.
Shares closed at $47.82 Monday and didn't trade premarket. The
stock has risen 48% the past year.
-By Jodi Xu, Dow Jones Newswires; 212-416-3037;
jodi.xu@dowjones.com