Allegheny Technologies Inc. (ATI) barely remained profitable in
the third quarter, as revenue was halved for the metals
processor.
Shares fell 7.9% premarket as the company also projected a
weak-fourth quarter profit and as the latest quarter's revenue also
missed analysts' estimates, falling by at least 45% across all
three of its major business segments. The stock had climbed about
45% the past two months.
Allegheny said it expects earnings for the current quarter "to
be similar to" the third quarter's 1-cent-a-share profit. Analysts'
average fourth-quarter estimate, according to Thomson Reuters, was
13 cents.
But the company expects earnings growth next year as Chairman
and Chief Executive Patrick Hassey called 2010 "a transition year
to the next growth cycle" in most of its markets.
"Looking past the remainder of 2009, the worst appears to be
behind us, and we remain confident in the intermediate and
long-term growth potential of our core markets," he added.
The metals processor, whose profit has been cut by the
recession, said in July that it only expected to break even in the
third quarter, even though it began seeing some signs of
stabilization in its customers' business.
Allegheny reported third-quarter earnings of $1.4 million, or 1
cent a share, down from $144.1 million, or $1.45, a year earlier.
Revenue declined 50% to $697.6 million for Allegheny, whose markets
stretch from aerospace and defense to chemical processing and food
equipment.
Analysts had most recently forecast earnings of 3 cents a share
on $739 million in sales.
Gross margin fell to 13.5% from 22% amid the revenue slump.
Allegheny said it had cut costs by more than $121 million during
the first nine months of this year and expects to exceed its 2009
goal of $150 million.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855; nathan.becker@dowjones.com;