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Allegheny (ATI), GE Aviation Form Meltless Titanium JV

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Allegheny Technologies Incorporated (ATI - Free Report) has entered into a joint venture (JV) with GE Aviation for developing a new meltless titanium alloy powder manufacturing technology. Titanium alloy powders are used in additive manufacturing applications including 3D printing. Financial terms of the JV were not divulged.

Under the JV, the companies will build a new R&D pilot production facility. Allegheny, a leader in advanced specialty materials, will offer operational, technical, and project support to the JV.

The JV will leverage Allegheny’s leadership in making specialty metal powders and premium-quality titanium and nickel-based alloys for technically advanced applications as well as GE Aviation’s engineering and development capabilities and technical knowledge of the use of alloyed titanium powders.

Allegheny has outperformed the Steel-Specialty Alloys industry over a year. The company’s shares have rallied 34.6% during this period compared with a roughly 19.8% gain recorded by the industry.


Alleghany recently provided its guidance for second-quarter 2017. It predicts earnings in the band of 4–9 cents per share and revenues in the range of $865–$890 million for the quarter. Alleghany also expects corporate and closed operations expenses to increase roughly $10 million on sequential comparison basis in the second quarter.    

Allegheny should benefit from its diversified global growth markets as well as cost reduction and restructuring measures. Also, the company is witnessing healthy demand from aerospace OEMs, buoyed by production ramp ups.  

However, Alleghany remains exposed to certain challenges in its core Flat Rolled Products (FRP) segment. Demand for its products in the oil and gas market is also expected to remain under pressure in the short haul.

Alleghany currently carries a Zacks Rank #3 (Hold).

Other Stocks to Consider

Better-placed companies in the basic materials space include POSCO (PKX - Free Report) , Kronos Worldwide, Inc. (KRO - Free Report) and Innospec Inc. (IOSP - Free Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

POSCO has an expected long-term earnings growth of 5%.

Kronos has an expected earnings growth of 354.8% for the current year.

Innospec has an expected earnings growth of 7.9% for the current year.

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