Allegheny Technologies Inc.'s (ATI) fourth-quarter earnings slid
60%, hurt by one-time charges and after a year-earlier gain, as the
company's sales rose but margins declined amid higher metal
prices.
The company also forecast current-year sales growth of 15% to
20%. Analysts surveyed by Thomson Reuters most recently expected
11% growth.
Chairman and Chief Executive L. Patrick Hassey said the company
expects "the resumption of strong secular growth in our key global
markets beginning in 2011."
"As the U.S. economy continues to recover in 2011, we believe
demand will increase for our standard stainless sheet and plate
products," Hassey said. "Our customers are closely watching price
trends in raw materials as surcharges can affect the timing of
their purchasing decisions."
Allegheny, a metal processor that makes products for the
aerospace and petrochemical industries, has experienced rising
revenue in recent quarters, though it has suffered from higher
steel prices lately. In November, the company agreed to acquire
fellow metal-products maker Ladish Co. (LDSH) in a cash-and-stock
deal that valued the company at about $778 million.
Allegheny reported a profit of $15.1 million, or 15 cents a
share, down from $37.8 million, or 36 cents, a year earlier. The
most-recent quarter included a $15.1 million inventory-valuation
reserve charge and $20.4 million in startup and idle-facility
costs, while the year-earlier quarter's earnings were helped by a
$43.8 million benefit and dinged by $13.5 million of startup and
idle-facility costs.
Revenue jumped 27% to $1.04 billion.
Analysts polled by Thomson Reuters had most recently forecast
earnings of 30 cents on $1.05 billion in revenue.
Gross margin plunged to 12.3% from 19.4%.
Sales in its flat-rolled products segment--its biggest by sales
and which makes stainless-steel sheets--jumped 34%, though profit
slid 19%. Revenue from its high-performance metal segment, which
makes titanium- and nickel-based alloys, increased 12% while profit
declined 28%.
Shares closed at $58.40 Tuesday and were inactive premarket. The
stock has risen 38% this year.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855; nathan.becker@dowjones.com;