RTI, Pratt & Whitney Ink 13-yr Deal
Titanium mill products maker RTI International Metals, Inc. (RTI) and United Technologies Corp.’s (UTX) unit Pratt & Whitney have signed a 13-year agreement; where RTI International will supply rotor-quality titanium mill products for the latter’s PurePower family of Geared Turbofan jet engines.
Following the deal, Pratt & Whitney will also be the engine launch customer for the new Electron Beam Furnace that commenced production at RTI’s Canton, Ohio facility.
This agreement is beneficial for RTI International in a number of ways. This deal will re-establish RTI International’s emergence as a competent supplier in the rotor-quality, jet engine titanium market. Additionally, the decision to invest in EB furnace technology will solidify RTI International’s position in the fast-growing aerospace market.
On Jun 19, RTI International’s wholly-owned subsidiary RTI Claro had signed a long-term contract with Bombardier Aerospace (Bombardier) to supply precision machined components and assemblies for different Bombardier aircraft models.
RTI International, which is among the prominent specialty steel companies along with Sutor Technology Group Limited (SUTR) and Material Sciences Corporation (MASC), posted its first-quarter 2013 results on Apr 30. The company’s reported earnings from continuing operations of 18 cents per share exceeded the Zacks Consensus Estimate of 15 cents and year-ago earnings of 17 cents. Profit from continuing operations increased to $5.5 million from $5.1 million in the prior-year quarter.
Revenues surged 21% to $187.5 million in the quarter from $154.6 million in the year-ago quarter. It was also ahead of the Zacks Consensus Estimate of $183 million.
RTI International expects its Boeing 787 pi-box seat track program to ramp up to a ten ship sets per month run rate by the end of 2013. It also anticipates its mill product shipments to Airbus and the Joint Strike Fighter to remain as previously projected. The company reaffirmed its operating income expectations for 2013, which is forecasted in a range of $65 million to $75 million.
RTI International currently carries a Zacks Rank #3 (Hold).
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