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Allegheny's (ATI) Earnings & Revenues Top Estimates in Q4
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Allegheny Technologies Inc. (ATI - Free Report) reported net earnings of $1.7 million or a penny per share for fourth-quarter 2017, compared with $9.9 million or 9 cents per share recorded a year-ago.
Barring one-time items, adjusted earnings came in at 27 cents per share for the quarter, which surpassed the Zacks Consensus Estimate of 14 cents.
Revenues for the quarter rose 14% year over year to $910 million, beating the Zacks Consensus Estimate of $904.5 million.
FY17 Results
For full-year 2017, the company reported net loss of $91.9 million, or 83 cents per share, compared with a prior-year loss of $640.9 million, or $5.97. Adjusted earnings for the year came in at $54.6 million or 48 cents per share, as against adjusted loss of $97.4 million or 91 cents recorded a year ago.
Allegheny reported revenues of $3.5 billion in 2017, up around 13% from $3.13 billion reported in 2016.
Allegheny Technologies Incorporated Price, Consensus and EPS Surprise
Revenues from the High Performance Materials & Components (HPMC) segment improved 9% year over year to $517.7 million in the fourth quarter due to higher sales of forged and cast components and nickel-based and specialty alloys.
Operating profit increased to $65.8 million from $53.8 million in the prior-year quarter. The segment’s profit reflects higher productivity from increasing aerospace and defense sales, an improved product mix of next-generation nickel alloys and forgings for the aero engine market and benefits of the 2016 titanium operation-restructuring activities.
The Flat-Rolled Products (FRP) segment’s sales rose 23% year over year to $392.2 million on the back of higher shipment volume for both high-value products and modestly higher selling prices of standard stainless and high-value products.
The segment’s operating profit came in at $22.4 million as against the year-ago quarter loss of $0.8 million. Results reflect favorable impact of an improved product mix, especially titanium and nickel-alloy products, and more stable prices of raw materials.
Financial Position
Allegheny’s cash in hand as of Dec 31, 2017 was $142 million, down 38.3% year over year. Long-term debt fell 13.6% to $1,530.6 million.
The company generated operating cash flows of $76 million in the quarter.
Outlook
Allegheny expects continued operating margin improvement and revenue growth in its HPMC unit in 2018 resulting from improved asset utilization and ongoing aerospace market demand growth. Allegheny also expects its FRP unit to build on the operational improvements and product mix benefits attained last year and improve operating margins.
However, the company expects first-quarter 2018 results to be unfavorably impacted by roughly $10 million, on a sequential basis, owing to reduced ferrochrome surcharges and required accounting changes on retirement benefit cost capitalization in inventory. The company sees the production ramp-up of the proposed joint venture with Tsingshan Stainless to meaningfully benefit FRP results in second-half 2018.
Price Performance
Shares of Allegheny have moved up 13.9% over the last three months outperforming the industry’s gain of 8.4%.
Zacks Rank & Key Picks
Allegheny currently carries a Zacks Rank #3 (Hold).
Methanex has an expected long-term earnings growth rate of 15%. Its shares have soared 27.8% over a year.
Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have rallied 28.1% in a year’s time.
BASF has an expected long-term earnings growth rate of 8.7%. Its shares gained 24.9% over a year.
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Allegheny's (ATI) Earnings & Revenues Top Estimates in Q4
Allegheny Technologies Inc. (ATI - Free Report) reported net earnings of $1.7 million or a penny per share for fourth-quarter 2017, compared with $9.9 million or 9 cents per share recorded a year-ago.
Barring one-time items, adjusted earnings came in at 27 cents per share for the quarter, which surpassed the Zacks Consensus Estimate of 14 cents.
Revenues for the quarter rose 14% year over year to $910 million, beating the Zacks Consensus Estimate of $904.5 million.
FY17 Results
For full-year 2017, the company reported net loss of $91.9 million, or 83 cents per share, compared with a prior-year loss of $640.9 million, or $5.97. Adjusted earnings for the year came in at $54.6 million or 48 cents per share, as against adjusted loss of $97.4 million or 91 cents recorded a year ago.
Allegheny reported revenues of $3.5 billion in 2017, up around 13% from $3.13 billion reported in 2016.
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 High Performance Materials & Components (HPMC) segment improved 9% year over year to $517.7 million in the fourth quarter due to higher sales of forged and cast components and nickel-based and specialty alloys.
Operating profit increased to $65.8 million from $53.8 million in the prior-year quarter. The segment’s profit reflects higher productivity from increasing aerospace and defense sales, an improved product mix of next-generation nickel alloys and forgings for the aero engine market and benefits of the 2016 titanium operation-restructuring activities.
The Flat-Rolled Products (FRP) segment’s sales rose 23% year over year to $392.2 million on the back of higher shipment volume for both high-value products and modestly higher selling prices of standard stainless and high-value products.
The segment’s operating profit came in at $22.4 million as against the year-ago quarter loss of $0.8 million. Results reflect favorable impact of an improved product mix, especially titanium and nickel-alloy products, and more stable prices of raw materials.
Financial Position
Allegheny’s cash in hand as of Dec 31, 2017 was $142 million, down 38.3% year over year. Long-term debt fell 13.6% to $1,530.6 million.
The company generated operating cash flows of $76 million in the quarter.
Outlook
Allegheny expects continued operating margin improvement and revenue growth in its HPMC unit in 2018 resulting from improved asset utilization and ongoing aerospace market demand growth. Allegheny also expects its FRP unit to build on the operational improvements and product mix benefits attained last year and improve operating margins.
However, the company expects first-quarter 2018 results to be unfavorably impacted by roughly $10 million, on a sequential basis, owing to reduced ferrochrome surcharges and required accounting changes on retirement benefit cost capitalization in inventory. The company sees the production ramp-up of the proposed joint venture with Tsingshan Stainless to meaningfully benefit FRP results in second-half 2018.
Price Performance
Shares of Allegheny have moved up 13.9% over the last three months outperforming the industry’s gain of 8.4%.
Zacks Rank & Key Picks
Allegheny currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the basic materials space are Methanex Corporation (MEOH - Free Report) , Steel Dynamics, Inc. (STLD - Free Report) and BASF SE (BASFY - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Methanex has an expected long-term earnings growth rate of 15%. Its shares have soared 27.8% over a year.
Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have rallied 28.1% in a year’s time.
BASF has an expected long-term earnings growth rate of 8.7%. Its shares gained 24.9% over a year.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>