Allegheny Technologies (ATI) Tops Q1 EPS by 18c, Revenues Beat
Allegheny Technologies (NYSE: ATI) reported Q1 EPS of ($0.06), $0.18 better than the analyst estimate of ($0.24). Revenue for the quarter came in at $692.5 million versus the consensus estimate of $638.31 million.
"Our first quarter financial results exceeded expectations, benefiting from the ongoing modest recovery in jet engine production, our aggressive 2020 cost cutting actions and a strong tailwind from nickel and other raw material prices," said Robert S. Wetherbee, President and CEO. "Despite our expected seasonal cash burn, our strong balance sheet and cash position ensure our ability to meet customer obligations and succeed in a challenging environment."
"We remain focused and on-track with our strategic business transformation efforts within the Advanced Alloys & Solutions segment to exit production of low-margin standard stainless sheet products in 2021 while growing profitable specialty products revenues over time," said Wetherbee. "It's imperative that each of ATI's business units stands on its own and has a cost structure that enables it to sustainably generate returns in excess of our cost of capital."
"Looking ahead to the second quarter, we expect continued modest demand recovery for our jet engine products, supported by increasing domestic air travel rates in the United States and other parts of the world," said Wetherbee. "Our jet engine forging share gains, won in 2019 and 2020, are beginning to pay dividends as industry production volumes increase. Combined with our aggressive 2020 cost cutting efforts, we expect to see continued margin improvement in our HPMC segment in 2021, accelerating in the second half of the year."
"While we are incredibly disappointed that the USW leadership decided to strike our Specialty Rolled Products locations beginning in late March, we remain committed to our business continuity plan to safely operate in a way that allows us to deliver to our customers on our quantity and quality commitments during this strike," continued Wetherbee. "Our operating teams are committed to minimizing the operational interruption and financial impact from the strike as we seek to reach a fair and equitable settlement with our striking workers."
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