Allegheny Joins Forces with Goodrich - Analyst Blog
December 06 2011 - 1:14PM
Zacks
Allegheny Technologies Incorporated (ATI) inked
a long-term sourcing agreement with the Goodrich
Corporation (GR) for the supply of aerospace forgings used
for landing gear components. This agreement boosts Allegheny’s
position in the aerospace supply chain.
The terms of the agreement, which begins in 2012 and lasts
through 2015, were not disclosed.
As per the agreement, ATI will supply components for aerospace
landing gear to Goodrich’s Landing Gear facilities in the U.S.,
Canada and Poland. The aerospace parts will be coming from the
company’s Poland-based ATI ZKM Forging. The Polish facility is part
of ATI Ladish, which became an operating unit last year when ATI
purchased Ladish Co.
ATI ZKM Forgings is in Stalowa Wola, Poland, and makes
engineered parts for aerospace and industrial uses. This agreement
displays Allegheny’s plans to broaden its aerospace component
business and further its global reach.
In October, Allegheny reported an increase in profit to $70.6
million or 63 cents per share (excluding acquisition related
expenses of $8.3 million, net of tax) in the third quarter of 2011
from $1.0 million or 1 cent per share in the same quarter of
2010.
Results exceeded the Zacks Consensus Estimate of 61 cents per
share.
Sales in the quarter increased 28% to $1.35 billion, driven by
higher shipments for most high-value products, higher raw material
surcharges and increases in average base selling prices for many
products. However, sales were lower than the Zacks Consensus
Estimate of $1.39 billion.
Segment operating profit surged 157% to $161.8 million, or 12.0%
of sales from $63.0 million, or 6.0% of sales, in the third quarter
of 2010.
Over the next 3 to 5 years, Allegheny expects to continue to
benefit from its new alloys and products, diversified global growth
markets and differentiated product mix. Demand is expected to be
strong for its mill products and highly engineered forged and cast
components generated from the aerospace market. Strong growth is
also expected from the oil and gas/chemical process industry for
its titanium-based alloys, nickel-based alloys and specialty
alloys, and tungsten products.
Allegheny Technologies, based in Pittsburgh, Pennsylvania,
produces and sells specialty metals worldwide. Its primary
competitor includes Carpenter Technology Corp.
(CRS). The company currently retains a Zacks #3 Rank, which
translates into a short-term rating of Hold.
ALLEGHENY TECH (ATI): Free Stock Analysis Report
CARPENTER TECH (CRS): Free Stock Analysis Report
GOODRICH CORP (GR): Free Stock Analysis Report
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