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Allegheny's (ATI) Earnings and Revenues Beat Estimates in Q4

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Allegheny Technologies Inc. ATI recorded net income of $56.5 million or 41 cents per share in fourth-quarter 2019, up from a profit of $41.1 million or 30 cents per share in the prior-year quarter.

Excluding one-time items, adjusted earnings per share were 36 cents that beat the Zacks Consensus Estimate of 32 cents.

The company delivered revenues of $1,018.6 million in the quarter, down 1.9% year over year. Nevertheless, the figure surpassed the Zacks Consensus Estimate of $990.5 million.

FY19 Results

In 2019, the company registered a profit of $257.6 million or $1.85 per share, up from $222.4 million or $1.61 a year ago.

Revenues rose 1.9% year over year to $4,122.5 million in 2019.

Allegheny Technologies Incorporated Price, Consensus and EPS Surprise

 

Allegheny Technologies Incorporated Price, Consensus and EPS Surprise
Allegheny Technologies Incorporated Price, Consensus and EPS Surprise

Allegheny Technologies Incorporated price-consensus-eps-surprise-chart | Allegheny Technologies Incorporated Quote

 

Segment Highlights

In the fourth quarter, revenues in the High Performance Materials & Components (HPMC) segment inched up 1.1% year over year to $602.8 million. The company noted that 77% of unit sales were attributable to the aerospace and defense markets. Also, sales of next-generation jet engine products contributed 53% to total HPMC jet engine product sales. Operating profit in the unit rose 22.1% year over year to $92.8 million. Margins benefitted from higher aerospace and defense markets sales as well as normal business seasonal patterns.

The Flat-Rolled Products (FRP) segment’s sales fell 5.9% year over year to $415.8 million. Per the company, lower demand for oil & gas related products as well as the automotive and general industrial markets impacted the unit’s sales. Operating profit in the division totaled $12.5 million, which rose 10.6% year over year.  

Financial Position

Allegheny ended 2019 with cash and cash equivalents of $490.8 million, up 28.5% year over year. Long-term debt fell 9.6% year over year at $1,387.4 million.

Cash from operating activities were $230.1 million for 2019, down 41.4% year over year.

Outlook

Going forward, the company expects first-quarter 2020 earnings to increase on a year-over-year basis despite challenges in the aerospace industry. The company is proactively managing its cost structure to minimize the negative financial impacts from the stoppage of 737 MAX production.

Price Performance

Shares of Allegheny have lost 28.2% in the past year compared with the industry’s 27% decline.



Zacks Rank & Key Picks

Allegheny currently carries a Zacks Rank #5 (Strong Sell).

Few better-ranked stocks in the basic materials space are Daqo New Energy Corp DQ, Royal Gold, Inc RGLD and Impala Platinum Holdings Limited IMPUY, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Daqo New Energy has projected earnings growth rate of 326.3% for 2020. The company’s shares have rallied 70.8% in the past year.

Royal Gold has an estimated earnings growth rate of 83.5% for fiscal 2020. Its shares have returned 26.4% in the past year.    

Impala Platinum has an expected earnings growth rate of 465.5% for fiscal 2020. The company’s shares have surged 231.1% in the past year.

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