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ATI's Q2 Earnings and Revenues Beat on Solid Jet Engine Sales
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ATI Inc. (ATI - Free Report) recorded a loss of $38 million or 31 cents per share in second-quarter 2022 compared with a loss of $49.2 million or 39 cents per share in the prior-year quarter. The bottom line in the reported quarter includes a $115.9 million non-cash loss on the sale of the Sheffield, UK operations.
Barring one-time items, adjusted earnings were 54 cents per share, beating the Zacks Consensus Estimate of 37 cents. Our estimate for the quarter was 36 cents.
The company delivered revenues of $959.5 million in the quarter, up 56% year over year. The figure surpassed the Zacks Consensus Estimate of $810.5 million. Our estimate for the quarter was $756.8 million. ATI gained from continued recovery in the commercial aerospace market and its ongoing transformation actions in the quarter. It witnessed strong jet engine sales growth in the quarter.
Revenues in the High Performance Materials & Components segment totaled $396.1 million, up around 32% year over year in the reported quarter. This compares to the consensus estimate of $356.2 million and our estimate of $373.3 million. The segment benefited from higher commercial aerospace sales, driven by continued higher demand for jet engine products. Sales of commercial jet engine products surged 90% year over year.
The Advanced Alloys & Solutions segment’s sales climbed 79% year over year to $563.4 million. This compares to the consensus estimate of $473.1 million and our estimate of $383.5 million. Sales in the year-ago quarter were impacted by labor strike largely at the company’s Specialty Rolled Products business. ATI saw sequentially higher sales in aerospace and defense market. Higher selling prices also contributed to the revenue growth.
Financial Position
ATI ended the quarter with cash and cash equivalents of $274 million, down around 42% sequentially. Long-term debt was up around 6% year over year to $1,703.3 million.
Cash used in operating activities was $222.4 million for the six months ended Jun 30, 2022.
Outlook
ATI projects the strength in its major markets to drive profitable revenue growth in the third quarter. It sees higher revenues to offset reduced seasonal volumes, maintenance outages and financial benefits from government programs and tariff refunds. It remains focused on creating long-term value through sustainable revenue, margin and free cash flow growth, the company noted.
Zacks Rank & Key Picks
ATI currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks worth considering in the basic materials space include Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) , Albemarle Corporation (ALB - Free Report) and Daqo New Energy Corp. (DQ - Free Report) .
Sociedad has a projected earnings growth rate of 513.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 57.8% upward in the past 60 days.
Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 28.2%. SQM has rallied roughly 91% in a year. The company sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle has a projected earnings growth rate of 231.4% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 3.6% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 2% in a year and currently carries a Zacks Rank #1.
Daqo New Energy, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 160.8% for the current year. The Zacks Consensus Estimate for DQ's earnings for the current year has been revised 13.5% upward in the past 60 days.
Daqo New Energy’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 10.8%. DQ has gained around 15% over a year.
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ATI's Q2 Earnings and Revenues Beat on Solid Jet Engine Sales
ATI Inc. (ATI - Free Report) recorded a loss of $38 million or 31 cents per share in second-quarter 2022 compared with a loss of $49.2 million or 39 cents per share in the prior-year quarter. The bottom line in the reported quarter includes a $115.9 million non-cash loss on the sale of the Sheffield, UK operations.
Barring one-time items, adjusted earnings were 54 cents per share, beating the Zacks Consensus Estimate of 37 cents. Our estimate for the quarter was 36 cents.
The company delivered revenues of $959.5 million in the quarter, up 56% year over year. The figure surpassed the Zacks Consensus Estimate of $810.5 million. Our estimate for the quarter was $756.8 million. ATI gained from continued recovery in the commercial aerospace market and its ongoing transformation actions in the quarter. It witnessed strong jet engine sales growth in the quarter.
ATI Inc. Price, Consensus and EPS Surprise
ATI Inc. price-consensus-eps-surprise-chart | ATI Inc. Quote
Segment Highlights
Revenues in the High Performance Materials & Components segment totaled $396.1 million, up around 32% year over year in the reported quarter. This compares to the consensus estimate of $356.2 million and our estimate of $373.3 million. The segment benefited from higher commercial aerospace sales, driven by continued higher demand for jet engine products. Sales of commercial jet engine products surged 90% year over year.
The Advanced Alloys & Solutions segment’s sales climbed 79% year over year to $563.4 million. This compares to the consensus estimate of $473.1 million and our estimate of $383.5 million. Sales in the year-ago quarter were impacted by labor strike largely at the company’s Specialty Rolled Products business. ATI saw sequentially higher sales in aerospace and defense market. Higher selling prices also contributed to the revenue growth.
Financial Position
ATI ended the quarter with cash and cash equivalents of $274 million, down around 42% sequentially. Long-term debt was up around 6% year over year to $1,703.3 million.
Cash used in operating activities was $222.4 million for the six months ended Jun 30, 2022.
Outlook
ATI projects the strength in its major markets to drive profitable revenue growth in the third quarter. It sees higher revenues to offset reduced seasonal volumes, maintenance outages and financial benefits from government programs and tariff refunds. It remains focused on creating long-term value through sustainable revenue, margin and free cash flow growth, the company noted.
Zacks Rank & Key Picks
ATI currently carries a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks worth considering in the basic materials space include Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) , Albemarle Corporation (ALB - Free Report) and Daqo New Energy Corp. (DQ - Free Report) .
Sociedad has a projected earnings growth rate of 513.7% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 57.8% upward in the past 60 days.
Sociedad’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average being 28.2%. SQM has rallied roughly 91% in a year. The company sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Albemarle has a projected earnings growth rate of 231.4% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 3.6% upward in the past 60 days.
Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 2% in a year and currently carries a Zacks Rank #1.
Daqo New Energy, currently carrying a Zacks Rank #1, has an expected earnings growth rate of 160.8% for the current year. The Zacks Consensus Estimate for DQ's earnings for the current year has been revised 13.5% upward in the past 60 days.
Daqo New Energy’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average being 10.8%. DQ has gained around 15% over a year.