Allegheny Technologies Earnings Cheat Sheet: Strong Quarterly Growth

S&P 500 (NYSE:SPY) component Allegheny Technologies Incorporated (NYSE:ATI) reported net income above Wall Street’s expectations for the first quarter. Allegheny Technologies Inc. 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 for the First Quarter

Results: Net income for Allegheny Technologies Incorporated rose to $56.3 million (54 cents/share) vs. $18.2 million (18 cents/share) in the same quarter a year earlier. A more than threefold rise from the year earlier quarter.

Revenue: Rose 36.5% to $1.23 billion YoY.

Actual vs. Wall St. Expectations: ATI beat the mean analyst estimate of 50 cents/share. Estimates ranged from 40 cents per share to 56 cents per share.

Quoting Management: “We continue to see 2011 marking the resumption of strong secular growth in our key global markets. We are off to a good start,” said L. Patrick Hassey, Chairman and Chief Executive Officer. “In the first quarter 2011, sales increased 36% compared to the same period in 2010 and shipments for most of our products increased significantly.”

“During the first quarter 2011, our key global markets, namely aerospace and defense, oil and gas/chemical process industry, electrical energy, and medical, represented 70% of ATI sales. Direct international sales were nearly 32% of sales,” Mr. Hassey said. ”

“We continue to expect 2011 revenue growth of 15% to 20% compared to 2010, and continue to expect segment operating profit to be approximately 15% of sales for the year. Strength in our key markets, improving shipments and improving base prices for most products, and our ongoing focus on cost reduction and operating execution gives us confidence that these goals can be achieved.”

Key Stats: Gross margins expanded last quarter, rising 3.2 percentage points to 16.7% from the year earlier quarter. This snaps a streak of two consecutive quarters of shrinking margins.

Over the last five quarters, revenue has increased 34.4% on average year over year. The biggest increase came in the third quarter of the last fiscal year, when revenue rose 51.8% from the year earlier quarter.

Competitors to Watch: RTI Intl. Metals, Inc. (NYSE:RTI), China Direct Industries, Inc. (NASDAQ:CDII), Titanium Metals Corp. (NYSE:TIE), AK Steel Holding Corp. (NYSE:AKS), Precision Castparts Corp. (NYSE:PCP), ArcelorMittal (NYSE:MT), Schnitzer Steel (NASDAQ:SCHN), Steel Dynamics (NASDAQ:STLD) and Nucor (NYSE:NUE).

Today’s Performance: Shares of ATI are trading at $71.43 as of April 27, 2011 at 9:55 AM ET, up from the previous close of $71.09.


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