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Why Is Allegheny (ATI) Down 14.8% Since the Last Earnings Report?
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It has been about a month since the last earnings report for Allegheny Technologies Incorporated (ATI - Free Report) . Shares have lost about 14.8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Allegheny Beats Q1 Earnings, Revenues Estimates
Allegheny reported earnings of $17.5 million or $0.16 per share for first-quarter 2017 against a loss of 101.2 million or $0.94 per share a year ago. Earnings per share beat the Zacks Consensus Estimate of $0.11.
Revenues for the quarter rose 14.3% year over year to $865.9 million, beating the Zacks Consensus Estimate of $850.5 million.
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. 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.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been three downward revisions for the current quarter compared to one upward.
Allegheny Technologies Incorporated Price and Consensus
At this time, Allegheny's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable solely for growth based on our styles scores.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of these revisions has been net zero. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Allegheny (ATI) Down 14.8% Since the Last Earnings Report?
It has been about a month since the last earnings report for Allegheny Technologies Incorporated (ATI - Free Report) . Shares have lost about 14.8% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Allegheny Beats Q1 Earnings, Revenues Estimates
Allegheny reported earnings of $17.5 million or $0.16 per share for first-quarter 2017 against a loss of 101.2 million or $0.94 per share a year ago. Earnings per share beat the Zacks Consensus Estimate of $0.11.
Revenues for the quarter rose 14.3% year over year to $865.9 million, beating the Zacks Consensus Estimate of $850.5 million.
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. 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.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been three downward revisions for the current quarter compared to one upward.
Allegheny Technologies Incorporated Price and Consensus
Allegheny Technologies Incorporated Price and Consensus | Allegheny Technologies Incorporated Quote
VGM Scores
At this time, Allegheny's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. Charting a somewhat similar path, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
The stock is suitable solely for growth based on our styles scores.
Outlook
While estimates have been broadly trending downward for the stock, the magnitude of these revisions has been net zero. Interestingly, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.