Has Allegheny Technologies Incorporated (NYSE:ATI) Improved Earnings Growth In Recent Times?
Assessing Allegheny Technologies Incorporated’s (NYSE:ATI) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how Allegheny Technologies is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its metals and mining industry peers. View our latest analysis for Allegheny Technologies
How Did ATI’s Recent Performance Stack Up Against Its Past?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method allows me to assess different companies in a uniform manner using the most relevant data points. For Allegheny Technologies, its most recent earnings (trailing twelve month) is -$83.7M, which, relative to last year’s level, has become less negative. Since these figures are relatively short-term thinking, I’ve created an annualized five-year value for Allegheny Technologies’s earnings, which stands at -$110.9M. This means despite the fact that net income is negative, it has become less negative over the years.
We can further assess Allegheny Technologies’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Allegheny Technologies has seen an annual decline in revenue of -7.01%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Looking at growth from a sector-level, the US metals and mining industry has been growing its average earnings by double-digit 41.23% in the previous twelve months, and a flatter -0.0097% over the past half a decade. This suggests that, even though Allegheny Technologies is currently unprofitable, it may have only just gained from the recent industry expansion, moving earnings into a more favorable position.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to predict what will occur going forward, and when. The most useful step is to examine company-specific issues Allegheny Technologies may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Allegheny Technologies to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for ATI’s future growth? Take a look at our free research report of analyst consensus for ATI’s outlook.
2. Financial Health: Is ATI’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
