Back to top

Image: Bigstock

ATI's Q3 Earnings & Sales Top on Aerospace and Defense Strength

Read MoreHide Full Article

ATI Inc. (ATI - Free Report) recorded profits of $61.1 million or 42 cents per share in third-quarter 2022 compared with a profit of $48.7 million or 35 cents per share in the prior-year quarter. The bottom line in the reported quarter includes a $19.9 million charge for a litigation settlement.

Barring one-time items, adjusted earnings came in at 53 cents per share, beating the Zacks Consensus Estimate of 52 cents.

The company delivered revenues of $1,032 million in the quarter, up around 42% year over year. The figure surpassed the Zacks Consensus Estimate of $898.1 million. ATI gained from continued sales growth in aerospace and defense markets in the quarter.

 

ATI Inc. Price, Consensus and EPS Surprise

 

ATI Inc. Price, Consensus and EPS Surprise

ATI Inc. price-consensus-eps-surprise-chart | ATI Inc. Quote

 

Segment Highlights

Revenues in the High Performance Materials & Components segment totaled $457.6 million, up around 53% year over year in the reported quarter. The segment benefited from higher commercial aerospace sales, driven by continued higher demand for jet engine products.

The Advanced Alloys & Solutions segment’s sales climbed 35% year over year to $574.4 million. Sales in the year-ago quarter were impacted by labor strike largely at the company’s Specialty Rolled Products business. ATI saw sequentially higher sales in aerospace and defense market, driven by commercial airframe products.

Financial Position

ATI ended the quarter with cash and cash equivalents of $329.1 million, down around 67% year over year. Long-term debt was up around 1% year over year to $1,700.4 million.

Cash used in operating activities was $99.4 million for the nine months ended Sep 30, 2022.

Outlook

ATI said that the uncertainties might impact its growth rates in the near-term. It expects ongoing strength in its key markets, especially aerospace and defense, to drive profitable revenue growth. The company also noted that the actions it has taken to transform its sales mix and operations have reduced volatility and enabled it to be more resilient against potential macroeconomic headwinds.

Price Performance

ATI’s shares are up 68.8% over a year compared with a 35.1% rise recorded by the industry.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Zacks Rank & Key Picks

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

Better-ranked stocks worth considering in the basic materials space include Albemarle Corporation (ALB - Free Report) , Commercial Metals Company (CMC - Free Report) and Reliance Steel & Aluminum Co. (RS - Free Report) .

Albemarle, currently carrying a Zacks Rank #2 (Buy), has a projected earnings growth rate of 430.9% for the current year. The Zacks Consensus Estimate for ALB's current-year earnings has been revised 5.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Albemarle’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 24.2%, on average. ALB has gained around 10% in a year.

Commercial Metals currently carries a Zacks Rank #2. The Zacks Consensus Estimate for CMC's current-year earnings has been revised 3.8% upward in the past 60 days.

Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 34% in a year.

Reliance Steel, currently carrying a Zacks Rank #2, has a projected earnings growth rate of 29.7% for the current year. The Zacks Consensus Estimate for RS's current-year earnings has been revised 0.1% upward in the past 60 days.

Reliance Steel’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 13.6%, on average. RS has gained around 25% in a year.

Published in