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; firstname.lastname@example.org