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December 02, 2008


Allegheny Technologies announces first quarter results

Allegheny Technologies Incorporated has posted net income of USD 142 million for the first quarter 2008 down by 28.2% YoY as against USD 197.8 million in the first quarter 2007.
First Quarter 2008 Financial Highlights

Jan-Mar '08Jan-Mar '07
Sales1,343.41,372.6
Net income142.0197.8
Net income1.41.92

USD in million

Allegheny Technologies titanium product shipments reached 12.2 million pounds in the first quarter 2008 up by 26% YoY. Shipments of exotic alloys and grain oriented electrical steel grew by 38% YoY and 15% YoY respectively. Shipments of our high performance metals segment nickel based and specialty alloys decreased by 8% YoY due primarily to inventory management actions at some distributor customers.

Mr L Patrick Hassey chairman, president & CEO of Allegheny Technologies said that "Our key growth markets were solid in the first quarter. Demand from the global aerospace and defense, chemical process industry, oil and gas, electrical energy, and medical markets accounted for nearly 70% of sales. We derived 28% of our sales dollars in the first quarter from direct international sales. We believe that more than 50% of our sales are driven by demand from non US markets."

Mr Hassey said that "First quarter 2008 earnings were similar to those achieved in the fourth quarter 2007. As previously stated, we had expected the first quarter to be negatively impacted by certain raw material costs being higher than the raw material surcharges included in our selling prices for certain products. While this mismatch was largely offset by a LIFO reserve benefit of approximately USD 74 million in the fourth quarter 2007, there was no such offset in the first quarter 2008. Cash flow from operations was USD 66 million in the first quarter and included an investment of USD 149 million in managed working capital to support the higher business volumes, primarily in our flat rolled products segment. Cash on hand at the end of the quarter was USD 468 million after the managed working capital investment, USD 112 million in capital investments and USD 62 million of share repurchases."

"ATI is positioned to continue to benefit from the current and long term global growth opportunities of our major end markets. We continue our investments to give us unsurpassed manufacturing capabilities, which enable profitable growth. We are not only focused on product diversification but also on global market diversification. We are committed to maintaining a strong balance sheet. Although the condition of the U.S. economy, the impact of Boeing's 787 schedule delay and continuing raw material cost volatility create near-term impacts, we believe the first quarter 2008 earnings represent the bottom. Generally, base selling prices are flat to higher; volumes continue to improve; and raw material surcharges are in better balance. As a result, we expect second quarter earnings to be somewhat higher than first quarter results."