We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Allegheny (ATI) Q4 Loss Lower than Expected, Revenues Miss
Read MoreHide Full Article
Allegheny Technologies Inc. (ATI - Free Report) reported an adjusted loss of 4 cents per share in fourth-quarter 2016, narrower than the Zacks Consensus Estimate of a loss of 11 cents.
The results exclude pre-tax restructuring charges of $29 million, including charges of $13 million related to closure related actions at the High Performance Materials & Components (HPMC) segment, and charges of $16 million for closure related actions at the Flat Rolled Products (FRP) segment.
Including one-time items, the company reported a net earnings (attributable to Allegheny) of $10 million or 9 cents per share for the quarter compared with the year-ago loss of $226.9 million or $2.12 per share.
Revenues for the fourth quarter rose 7.7% year over year to $796.1 million, but missed the Zacks Consensus Estimate of $817 million. The top line increased 3.3% from the sequentially prior quarter.
Allegheny Technologies Incorporated Price, Consensus and EPS Surprise
Revenues from the HPMC segment improved 4% year over year to $477.2 million in the fourth quarter mainly due to increased sales of nickel-based and specialty stainless alloys as well as forged and cast components. Operating profit increased to $53.8 million from $21 million in the prior-year quarter. The segments profits have improved for six consecutive quarters, reflecting the impact of restructuring activities, including the idling of the titanium sponge plant at Rowley.
The FRP segment’s sales rose 13% year over year to $318.9 million, supported by improving market conditions from the exceptionally weak conditions in the prior-year quarter.
Segment operating loss was $0.8 million compared with an operating loss of $120.1 million in the year-ago quarter. The segment’s losses narrowed due to better average selling prices as well as benefits from improving operating performance.
Financial Position
Allegheny’s cash in hand as of Dec 31, 2016 was $229.6 million, up 53.3% year over year. Long-term debt increased 18.8% to $1,771.9 million.
Cash used by operations for 2016 was $43.7 million. Total debt to total capitalization was 58.3% at the end of the fourth quarter, up from 42% a year ago.
Outlook
Management remains focused on returning the company to sustainable profitable growth with an emphasis on strong balance sheet and cash flow generation. The company has been concentrating on restructuring initiatives for the same.
The HPMC segment’s sales are expected to rise roughly 10% and operating profit as a percentage of sales is expected to improve to the low teens in 2017. The company expects the FRP segment to see sequential sales growth in the first two quarters of 2017, but it remains cautious for the second half due to challenging market conditions. The segment is expected to reach a low-single digit operating profit level, as a percentage of sales in 2017.
The company projects capital expenditure of $125 million for full-year 2017. Beyond that capital expenditures are expected not to exceed over $100 million annually for several years.
Allegheny’s shares have gained almost 12.4% in the last three months while the Zacks categorized Steel-Speciality industry has gained about 6.8% over the same period.
Zacks Rank
Allegheny currently carries a Zacks Rank #3 (Hold).
U.S. Steel has an expected long-term growth rate of 8%.
AK Steel has an expected long-term growth rate of 5%.
POSCO has an expected long-term growth rate of 5%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
See More Zacks Research for These Tickers
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Allegheny (ATI) Q4 Loss Lower than Expected, Revenues Miss
Allegheny Technologies Inc. (ATI - Free Report) reported an adjusted loss of 4 cents per share in fourth-quarter 2016, narrower than the Zacks Consensus Estimate of a loss of 11 cents.
The results exclude pre-tax restructuring charges of $29 million, including charges of $13 million related to closure related actions at the High Performance Materials & Components (HPMC) segment, and charges of $16 million for closure related actions at the Flat Rolled Products (FRP) segment.
Including one-time items, the company reported a net earnings (attributable to Allegheny) of $10 million or 9 cents per share for the quarter compared with the year-ago loss of $226.9 million or $2.12 per share.
Revenues for the fourth quarter rose 7.7% year over year to $796.1 million, but missed the Zacks Consensus Estimate of $817 million. The top line increased 3.3% from the sequentially prior quarter.
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 4% year over year to $477.2 million in the fourth quarter mainly due to increased sales of nickel-based and specialty stainless alloys as well as forged and cast components. Operating profit increased to $53.8 million from $21 million in the prior-year quarter. The segments profits have improved for six consecutive quarters, reflecting the impact of restructuring activities, including the idling of the titanium sponge plant at Rowley.
The FRP segment’s sales rose 13% year over year to $318.9 million, supported by improving market conditions from the exceptionally weak conditions in the prior-year quarter.
Segment operating loss was $0.8 million compared with an operating loss of $120.1 million in the year-ago quarter. The segment’s losses narrowed due to better average selling prices as well as benefits from improving operating performance.
Financial Position
Allegheny’s cash in hand as of Dec 31, 2016 was $229.6 million, up 53.3% year over year. Long-term debt increased 18.8% to $1,771.9 million.
Cash used by operations for 2016 was $43.7 million. Total debt to total capitalization was 58.3% at the end of the fourth quarter, up from 42% a year ago.
Outlook
Management remains focused on returning the company to sustainable profitable growth with an emphasis on strong balance sheet and cash flow generation. The company has been concentrating on restructuring initiatives for the same.
The HPMC segment’s sales are expected to rise roughly 10% and operating profit as a percentage of sales is expected to improve to the low teens in 2017. The company expects the FRP segment to see sequential sales growth in the first two quarters of 2017, but it remains cautious for the second half due to challenging market conditions. The segment is expected to reach a low-single digit operating profit level, as a percentage of sales in 2017.
The company projects capital expenditure of $125 million for full-year 2017. Beyond that capital expenditures are expected not to exceed over $100 million annually for several years.
Allegheny’s shares have gained almost 12.4% in the last three months while the Zacks categorized Steel-Speciality industry has gained about 6.8% over the same period.
Zacks Rank
Allegheny currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies in the steel space include United States Steel Corp. (X - Free Report) , AK Steel Holding Corp. and POSCO (PKX - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
U.S. Steel has an expected long-term growth rate of 8%.
AK Steel has an expected long-term growth rate of 5%.
POSCO has an expected long-term growth rate of 5%.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>