Allegheny's 1Q View Disappoints - Analyst Blog
April 19 2013 - 1:20PM
Zacks
Allegheny Technologies Inc. (ATI) said that it
envisions first-quarter 2013 profit of roughly $10 million or 9
cents per share, a sharp decline from $56.2 million or 50 cents a
share earned a year ago.
The Pittsburgh-based company expects sales of around $1.18 billion
for the first quarter. This indicates a roughly 13% decline from
revenues of $1.35 billion logged in the prior-year quarter.
Allegheny, which is among the prominent players in the U.S.
specialty steel industry along with Carpenter
Technology (CRS), Haynes International
(HAYN) and Precision Castparts (PCP), noted that
it saw lower pricing and soft demand for its products in the first
quarter. It witnessed record low selling prices for cold-rolled
standard sheet as a result of low-cost imports. Demand for
zirconium and related alloys was also weak.
Allegheny further noted that declining raw materials prices
continued to hurt its sales. While its contract business was stable
in the quarter, transactional business was negatively impacted by
lower raw materials prices and short lead times.
Allegheny reported its fourth-quarter 2012 results in Jan 2013. The
company’s profit slid 67% year over year as sluggish economic
conditions hurt demand for its products. Adjusted earnings of 18
cents per share, however, managed to beat the Zacks Consensus
Estimate by a penny. Sales fell at a double-digit clip and
missed the Zacks Consensus Estimate.
While Allegheny is expected to continue benefiting from its new
alloys/products and diversified global growth markets, it is
contending with a soft economy. Moreover, reduced raw material
surcharges and low base prices for standard stainless products are
affecting the results of the company’s Flat-Rolled Products
division. Its business environment is expected to remain
challenging through first-half 2013 given the uncertain global
economy.
Nevertheless, Allegheny sees growth in its key end-markets such as
aerospace, oil and gas, electrical energy and medical over the long
term. The company also expects improved results in its Flat-Rolled
Products segment, driven by the Hot-Rolling and Processing
Facility. Construction of the facility is expected to complete by
end-2013 with official commissioning is expected in first-half
2014.
Allegheny, which currently holds a short-term Zacks Rank #5 (Strong
Sell), will announce its first quarter results before the opening
bell on Apr 24.
ALLEGHENY TECH (ATI): Free Stock Analysis Report
CARPENTER TECH (CRS): Free Stock Analysis Report
HAYNES INTL INC (HAYN): Free Stock Analysis Report
PRECISION CASTP (PCP): Free Stock Analysis Report
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