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Allegheny Technologies Inc. (ATI - Free Report) reported earnings of $17.5 million or 16 cents per share for first-quarter 2017 compared with a loss of 101.2 million or 94 cents per share a year ago. Earnings per share beat the Zacks Consensus Estimate of 11 cents.
Revenues for the quarter rose 14.3% year over year to $865.9 million, also coming ahead of the Zacks Consensus Estimate of $850.5 million.
Allegheny Technologies Incorporated Price, Consensus and EPS Surprise
Revenues from the HPMC segment improved 3.5% year over year to $510.4 million in the first quarter due to increased sales of nickel-based and specialty alloys mill products, and forged components. Operating profit increased to $51 million from $29.1 million in the prior-year quarter. The segment’s profit reflect higher productivity from increasing aerospace and defense sales and benefits of 2016 titanium operations restructuring activities.
The FRP segment’s sales rose 34.4% year over year to $355.5 million on the back of improved pricing for both high-value and standard stainless products and higher volumes.
Segment operating profit was $19 million compared with an operating loss of $109.6 million in the year-ago quarter. The results were partly driven by benefits of cost reductions and restructuring actions and recovery of raw material costs.
Financial Position
Allegheny’s cash in hand as of Mar 31, 2017 was $160 million, up 1.84% year over year. Long-term debt increased 18.7% to $1,772.5 million.
Cash used in operations for the quarter was $110.2 million. Total debt to total capitalization was 58.5% at the end of the first quarter, up from 45.4% a year ago.
Outlook
Allegheny expects its cost structure to continue to improve in 2017 due to the titanium operations restructuring actions taken last year.
The HPMC segment’s sales are expected to rise roughly 10% and operating profit as a percentage of sales is expected to be at low-double-digit in 2017. The company expects the FRP segment to return to profitability at a low-single digit operating profit level, as a percentage of sales, in 2017. The company continues to project capital expenditure of $125 million for full-year 2017.
Price Performance
Allegheny’s shares rallied almost 34.9% in the last six months, outperforming the Zacks categorized Steel-Speciality industry’s gain of about 12.1%.
Zacks Rank
Allegheny currently carries a Zacks Rank #3 (Hold).
Chemours has an expected long-term growth of 15.5%.
Kronos Worldwide has an expected long-term growth of 5%.
Arkema has an expected long-term growth of 12.34%.
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Allegheny (ATI) Beats Q1 Earnings, Revenue Estimates
Allegheny Technologies Inc. (ATI - Free Report) reported earnings of $17.5 million or 16 cents per share for first-quarter 2017 compared with a loss of 101.2 million or 94 cents per share a year ago. Earnings per share beat the Zacks Consensus Estimate of 11 cents.
Revenues for the quarter rose 14.3% year over year to $865.9 million, also coming ahead of the Zacks Consensus Estimate of $850.5 million.
Allegheny Technologies Incorporated Price, Consensus and EPS Surprise
Allegheny Technologies Incorporated Price, Consensus and EPS Surprise | Allegheny Technologies Incorporated Quote
Segment Highlights
Revenues from the HPMC segment improved 3.5% year over year to $510.4 million in the first quarter due to increased sales of nickel-based and specialty alloys mill products, and forged components. Operating profit increased to $51 million from $29.1 million in the prior-year quarter. The segment’s profit reflect higher productivity from increasing aerospace and defense sales and benefits of 2016 titanium operations restructuring activities.
The FRP segment’s sales rose 34.4% year over year to $355.5 million on the back of improved pricing for both high-value and standard stainless products and higher volumes.
Segment operating profit was $19 million compared with an operating loss of $109.6 million in the year-ago quarter. The results were partly driven by benefits of cost reductions and restructuring actions and recovery of raw material costs.
Financial Position
Allegheny’s cash in hand as of Mar 31, 2017 was $160 million, up 1.84% year over year. Long-term debt increased 18.7% to $1,772.5 million.
Cash used in operations for the quarter was $110.2 million. Total debt to total capitalization was 58.5% at the end of the first quarter, up from 45.4% a year ago.
Outlook
Allegheny expects its cost structure to continue to improve in 2017 due to the titanium operations restructuring actions taken last year.
The HPMC segment’s sales are expected to rise roughly 10% and operating profit as a percentage of sales is expected to be at low-double-digit in 2017. The company expects the FRP segment to return to profitability at a low-single digit operating profit level, as a percentage of sales, in 2017. The company continues to project capital expenditure of $125 million for full-year 2017.
Price Performance
Allegheny’s shares rallied almost 34.9% in the last six months, outperforming the Zacks categorized Steel-Speciality industry’s gain of about 12.1%.
Zacks Rank
Allegheny currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked companies in the basic materials space include The Chemours Company (CC - Free Report) , Kronos Worldwide Inc (KRO - Free Report) and Arkema S.A. (ARKAY - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chemours has an expected long-term growth of 15.5%.
Kronos Worldwide has an expected long-term growth of 5%.
Arkema has an expected long-term growth of 12.34%.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>