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ATI Q3 Earnings Beat Estimates on Aerospace Demand, Outlook Raised
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Key Takeaways
ATI's Q3 adjusted EPS rose 71.8% to $1.46, beating estimates by 7.4%, while sales climbed 26.5% to $1.42B.
Aerospace and defense sales reached $994.5M, accounting for 69% of revenues, amid strong jet engine demand.
ATI raised its 2026 adjusted EPS outlook to $5.17-$5.23 and EBITDA guidance to $1.19-$1.2 billion.
ATI Inc. (ATI - Free Report) reported adjusted earnings of $1.46 per share for the third quarter of 2026, up 71.8% from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $1.36 by 7.4%.
Sales of $1.42 billion rose 26.5% year over year and surpassed the consensus estimate of $1.32 billion by 7.7%. Strong aerospace and defense demand, favorable pricing and higher commercial jet engine sales supported the quarter. Aerospace and defense sales totaled $994.5 million, accounting for 69% of total revenues.
High Performance Materials & Components generated sales of $721.4 million in the third quarter, up 19.7% from $602.9 million in the year-ago period. However, the figure fell short of the consensus estimate of $669 million. Growth was primarily driven by a 34% increase in commercial jet engine product sales, supported by strong demand and pricing. The segment EBITDA margin contracted to 23.2% from 24.2% a year ago. Higher manufacturing and period costs, including expenses associated with ramping commercial production of a new nickel-based superalloy, weighed on profitability.
Advanced Alloys & Solutions reported sales of $702.3 million, up 34.4% from $522.6 million in the prior-year quarter. The figure surpassed the consensus estimate of $550 million. Growth was supported by higher aerospace and defense, specialty energy and conventional energy sales. Commercial jet engine product sales almost doubled on stronger demand and pricing. The segment EBITDA margin expanded to 25.8% from 17.3% a year ago. Higher pricing, increased volumes and a favorable sales mix supported the improvement. Segment EBITDA more than doubled to $181.3 million from $90.4 million.
ATI Inc.'s Cash Flow and Balance Sheet Position
ATI ended the third quarter with cash and cash equivalents of $442.3 million compared with $416.7 million at the end of 2025. Long-term debt stood at $1.81 billion, while the current portion of debt and short-term borrowings totaled $49.7 million.
Cash provided by operating activities was $154.6 million during the quarter, while capital expenditures totaled $92.8 million. Adjusted free cash flow came in at $79.6 million, down from $199.7 million a year ago.
Managed working capital represented 32.9% of annualized sales, down 140 basis points sequentially. The company also repurchased $70 million worth of shares during the quarter, leaving $425 million under its existing repurchase authorization.
ATI Raises Full-Year 2026 Earnings Outlook
ATI expects fourth-quarter 2026 adjusted EBITDA between $345 million and $355 million. Adjusted earnings are projected in the range of $1.51-$1.57 per share, reflecting management's expectations for continued operating momentum.
For full-year 2026, ATI raised its adjusted EBITDA guidance to $1.19-$1.2 billion from the previous range of $1.135-$1.185 billion. The midpoint increased by $35 million, following a $125 million upward revision in the preceding quarter.
The company also increased its full-year adjusted earnings guidance to $5.17-$5.23 per share from $4.90-$5.18 previously. Adjusted free cash flow guidance remained unchanged at $550-$600 million.
Management attributed the stronger outlook to sustained demand supported by long-term agreements, differentiated manufacturing capabilities and disciplined operational execution. ATI expects these factors to support further growth in 2027.
ATI’s Price Performance
ATI’s shares have gained 68% over a year against the 12.2% fall recorded by the industry.
Image Source: Zacks Investment Research
ATI’s Zacks Rank & Other Key Picks
ATI currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the Basic Materials space are Reliance, Inc. (RS - Free Report) , Avino Silver & Gold Mines Ltd. (ASM - Free Report) and Element Solutions Inc. (ESI - Free Report) .
The Zacks Consensus Estimate for RS’ 2026 earnings is pegged at $23.70 per share, indicating a 66.2% year-over-year surge. RS shares have gained 55.3% over the past year.
The Zacks Consensus Estimate for ASM’s current fiscal-year earnings is pinned at 28 cents per share. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 75%.
The Zacks Consensus Estimate for ESI’s 2026 earnings is pegged at $1.85 per share, indicating a year-over-year rise of 24.2%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 6%.
View the Zacks #1 Rank List
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ATI Q3 Earnings Beat Estimates on Aerospace Demand, Outlook Raised
Key Takeaways
ATI Inc. (ATI - Free Report) reported adjusted earnings of $1.46 per share for the third quarter of 2026, up 71.8% from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $1.36 by 7.4%.
Sales of $1.42 billion rose 26.5% year over year and surpassed the consensus estimate of $1.32 billion by 7.7%. Strong aerospace and defense demand, favorable pricing and higher commercial jet engine sales supported the quarter. Aerospace and defense sales totaled $994.5 million, accounting for 69% of total revenues.
ATI Inc. Price, Consensus and EPS Surprise
ATI Inc. price-consensus-eps-surprise-chart | ATI Inc. Quote
ATI Inc.'s Segment Performance
High Performance Materials & Components generated sales of $721.4 million in the third quarter, up 19.7% from $602.9 million in the year-ago period. However, the figure fell short of the consensus estimate of $669 million. Growth was primarily driven by a 34% increase in commercial jet engine product sales, supported by strong demand and pricing. The segment EBITDA margin contracted to 23.2% from 24.2% a year ago. Higher manufacturing and period costs, including expenses associated with ramping commercial production of a new nickel-based superalloy, weighed on profitability.
Advanced Alloys & Solutions reported sales of $702.3 million, up 34.4% from $522.6 million in the prior-year quarter. The figure surpassed the consensus estimate of $550 million. Growth was supported by higher aerospace and defense, specialty energy and conventional energy sales. Commercial jet engine product sales almost doubled on stronger demand and pricing. The segment EBITDA margin expanded to 25.8% from 17.3% a year ago. Higher pricing, increased volumes and a favorable sales mix supported the improvement. Segment EBITDA more than doubled to $181.3 million from $90.4 million.
ATI Inc.'s Cash Flow and Balance Sheet Position
ATI ended the third quarter with cash and cash equivalents of $442.3 million compared with $416.7 million at the end of 2025. Long-term debt stood at $1.81 billion, while the current portion of debt and short-term borrowings totaled $49.7 million.
Cash provided by operating activities was $154.6 million during the quarter, while capital expenditures totaled $92.8 million. Adjusted free cash flow came in at $79.6 million, down from $199.7 million a year ago.
Managed working capital represented 32.9% of annualized sales, down 140 basis points sequentially. The company also repurchased $70 million worth of shares during the quarter, leaving $425 million under its existing repurchase authorization.
ATI Raises Full-Year 2026 Earnings Outlook
ATI expects fourth-quarter 2026 adjusted EBITDA between $345 million and $355 million. Adjusted earnings are projected in the range of $1.51-$1.57 per share, reflecting management's expectations for continued operating momentum.
For full-year 2026, ATI raised its adjusted EBITDA guidance to $1.19-$1.2 billion from the previous range of $1.135-$1.185 billion. The midpoint increased by $35 million, following a $125 million upward revision in the preceding quarter.
The company also increased its full-year adjusted earnings guidance to $5.17-$5.23 per share from $4.90-$5.18 previously. Adjusted free cash flow guidance remained unchanged at $550-$600 million.
Management attributed the stronger outlook to sustained demand supported by long-term agreements, differentiated manufacturing capabilities and disciplined operational execution. ATI expects these factors to support further growth in 2027.
ATI’s Price Performance
ATI’s shares have gained 68% over a year against the 12.2% fall recorded by the industry.
Image Source: Zacks Investment Research
ATI’s Zacks Rank & Other Key Picks
ATI currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the Basic Materials space are Reliance, Inc. (RS - Free Report) , Avino Silver & Gold Mines Ltd. (ASM - Free Report) and Element Solutions Inc. (ESI - Free Report) .
RS currently sports a Zacks Rank #1, while ESI and AVNT carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here
The Zacks Consensus Estimate for RS’ 2026 earnings is pegged at $23.70 per share, indicating a 66.2% year-over-year surge. RS shares have gained 55.3% over the past year.
The Zacks Consensus Estimate for ASM’s current fiscal-year earnings is pinned at 28 cents per share. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 75%.
The Zacks Consensus Estimate for ESI’s 2026 earnings is pegged at $1.85 per share, indicating a year-over-year rise of 24.2%. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 6%.