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Allegheny (ATI) Tops Earnings and Revenue Estimates in Q1

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Allegheny Technologies Inc. (ATI - Free Report) recorded net income of $21.1 million or 16 cents per share in first-quarter 2020, up from $15 million or 12 cents per share in the prior-year quarter.

Excluding one-time items, adjusted earnings per share were 20 cents that beat the Zacks Consensus Estimate of 13 cents.

The company delivered revenues of $955.5 million in the quarter, down 4.9% year over year. Nevertheless, the figure surpassed the Zacks Consensus Estimate of $913 million.

Allegheny Technologies Incorporated Price, Consensus and EPS Surprise


Segment Highlights

In the first quarter, revenues in the High Performance Materials & Components (“HPMC”) segment declined 15.4% year over year to $420.3 million. The company noted that 85% of unit sales were attributable to the aerospace and defense markets. Also, sales of next-generation jet engine products contributed 50% to total HPMC jet engine product sales. Operating profit in the unit rose 10.4% year over year to $57.1 million.

The Advanced Alloys & Solutions (“AA&S”) segment’s sales rose 5.3% year over year to $535.2 million. Per the company, higher HRPF conversion services billings as well as the aerospace and defense markets supported the unit’s sales. Operating profit in the division totaled $24.1 million, which rose 141% year over year. Margins benefitted from improved results from the STAL joint venture and higher surcharges on raw materials.

Financial Position

Allegheny ended the quarter with cash and cash equivalents of $639 million, up 294.5% year over year. Long-term debt fell 9.5% year over year at $1,390 million.

Net cash used in operating activities for the first quarter was $115.4 million.


The company withdrew its guidance for 2020 due to uncertainties created by the coronavirus outbreak. Going forward, it expects challenging and uncertain economic conditions to sustain due to the impacts of the coronavirus on the global aerospace industry.

Price Performance

Shares of Allegheny have lost 66.5% in the past year compared with the industry’s 62.8% decline.



Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Equinox Gold Corp. (EQX - Free Report) , Franco-Nevada Corporation (FNV - Free Report) and Newmont Corporation (NEM - Free Report) .

Equinox Gold currently sports a Zacks Rank #1 (Strong Buy)and has a projected earnings growth rate of 231% for 2020. The company’s shares have gained 52.9% in a year.You can see the complete list of today’s Zacks #1 Rank stocks here.

Franco-Nevada has a projected earnings growth rate of 22% for 2020. It currently carries a Zacks Rank #2 (Buy). The company’s shares have rallied 105.5% in a year.

Newmont has a projected earnings growth rate of 96.2% for the current year. The company’s shares have rallied around 113% in a year. It currently has a Zacks Rank #2.

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