Titanium Repurchases Shares - Analyst Blog
August 22 2011 - 4:30AM
Zacks
Titanium Metals
Corporation (TIE) announced the purchase of 600,000
shares of its common stock. The shares were purchased at a price of
$13.8305 per share exclusive of commissions.
Few days back, the company also
repurchased 600,000 shares of its common stock at an average price
of $13.6492 per share (exclusive of commissions).
Recently, the company released its
financial results for the second quarter of 2011. Titanium reported
net earnings of $31.5 million or 18 cents per share in the second
quarter of 2011, surpassing the Zacks Consensus Estimate of 16
cents and increasing from the prior-year earnings of $19.0 million
or 11 cents per share.
Quarterly revenues of $272 million
increased 28.3% year over year, beating the Zacks Consensus
Estimate of $267 million. Increased sales were driven by a rise in
sales volumes for both melted and mill products, primarily
reflecting improved demand for titanium products in the commercial
aerospace sector.
Cost of sales jumped 22.1% over the
prior-year quarter to $209.1 million. As a percentage of sales,
costs plunged 76.9% in the reported quarter from 80.8% in the
year-ago quarter. For the second quarter of 2011, gross profit was
$62.9 million compared with $40.8 million in the second quarter of
2010, reflecting higher sales volume and the related efficiencies
resulting from greater utilization of its manufacturing capacity,
as demand continues to improve.
Selling, general, and
administrative expense also increased 16.7% year over year to $16.8
million.
Operating income in the reported
quarter spiked significantly by 74% to $46.5 million. Increased
manufacturing activity, together with Titanium’s ongoing focus on
cost control, contributed to improved operating income versus the
prior year.
Melted product shipments of 1,790
metric tons increased 37.2% from last year’s shipments of 1,305
metric tons. Average selling price moved down slightly from $20.70
per kilogram to $20.65 per kilogram. Milled products shipments of
4,220 metric tons also surged 33.1% from 3,170 metric tons and
product prices plunged to $51.15 per kilogram from $53.10 per
kilogram in the second quarter of 2010.
Titanium Metals faced increased
demand in the industrial sector as infrastructure and chemical
projects were reinvigorated by the global economic recovery. The
company expects this trend to continue in 2011. Titanium also
expects to drive efficiency through process technology and cost
reduction initiatives.
Delaware-based Titanium Metals is
the leading worldwide producer of titanium metal products.
Titanium Metals has been successful
over the last several years in establishing significant flexibility
and cost advantages in its entire manufacturing process. The
company’s fiscal discipline and industry experience have allowed it
to manage its production rates and costs effectively while
investing capital conservatively and maintaining a strong,
debt-free balance sheet. The company’s financial strength and
operating flexibility position it to take advantage of
opportunities for strengthening and expanding its presence in key
markets.
The company competes with
Allegheny Technologies Inc. (ATI) and RTI
International Metals, Inc. (RTI).
We maintain our Neutral
recommendation on Titanium. Currently, the company holds a Zacks #2
Rank (Buy).
ALLEGHENY TECH (ATI): Free Stock Analysis Report
RTI INTL METALS (RTI): Free Stock Analysis Report
TITANIUM METALS (TIE): Free Stock Analysis Report
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