Allegheny Tech Earnings: Four Straight Quarters of Profit Drops

S&P 500 (NYSE:SPY) component Allegheny Technologies Incorporated (NYSE:ATI) reported its results for the third quarter. Allegheny Technologies is a global producer of specialty metals. Through its innovative technologies, the company offers a wide range of specialty metals solutions and products, which include titanium and titanium alloys, nickel-based and superalloys, etc.

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Allegheny Technologies Incorporated Earnings Cheat Sheet

Results: Net income for Allegheny Technologies Incorporated fell to $35.3 million (32 cents per share) vs. $62.3 million (56 cents per share) a year earlier. This is a decline of 43.3% from the year-earlier quarter.

Revenue: Fell 9.8% to $1.22 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Allegheny Technologies Incorporated fell short of the mean analyst estimate of 39 cents per share. It fell short of the average revenue estimate of $1.38 billion.

Quoting Management: “Continuing uncertainty regarding global economic conditions impacted our third quarter 2012 results,” said Rich Harshman, Chairman, President and Chief Executive Officer. “We are seeing conservative inventory management throughout the supply chains of most of our major end markets. These actions appear to be driven by concerns about the U.S. election and resolution of the U.S. ‘fiscal cliff’, and uncertain economic trends in China, Europe, and Japan.”

Key Stats:

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the third quarter of the last fiscal year, which saw revenue rise 27.7%.

For three quarters in a row, the company’s net income has fallen. In the second quarter, net income fell 11.9% from the year earlier, while the figure fell 0.2% in the first quarter.

For two quarters in a row, the company has come in under analyst estimates. In the second quarter, it missed expectations by 4 cents with net income of 50 cents versus a mean estimate of net income of 54 cents per share.

The company’s cost of sales fell 7% from a year earlier to $1.06 billion. Last quarter, cost of sales was 86.7% of revenue versus 84% a year earlier.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from 63 cents a share to 49 cents over the last ninety days. At $1.89 per share, the average estimate for the fiscal year has fallen from $2.23 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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