NEW YORK Allegheny
Technologies Inc. (ATI) expects first-quarter net income of
some $10 million on sales of $1.18 billion as "record-low"
prices have crimped its results, the company said in an April
Richard Harshman, ATIs
chairman, president and chief executive officer, has said in
January that the first quarter would be "challenging" (
amm.com, Jan. 23).
"Operating performance continued
to be impacted by record-low base selling prices for
cold-rolled standard sheet, primarily due to low-priced
imports, weak demand and low prices for grain-oriented
electrical steel, and weak demand for our zirconium and related
alloys," he said in a statement.
"In addition, falling raw
materials prices continued to impact sales and operating
income," he said.
Contract business was mostly
steady. But transactional business was soft due to falling raw
materials prices and short lead times, and many customers
continued with conservative inventory management, Harshman
said. "Higher inventory costs, including higher conversion
costs due to lower operating rates in the fourth quarter of
2012 and manufacturing cycle times for some of our products
that do not align raw materials costs with lower surcharges and
indexes, reduced operating income."
Harshman believes that market
conditions remain favorable for secular growth from
Pittsburgh-based ATIs key aerospace, oil and gas/chemical
process industry, electrical energy and medical markets over
the long term, and sees significantly improved operating
performance in its flat-rolled product segment to result from
the hot-rolling and processing facility scheduled for
completion by the end of 2013. "Formal commissioning is
expected to occur through the first half of 2014," he said.
ATI is slated to release its
quarterly results April 24.
Subsidiary ATI Allegheny Ludlum
Corp. announced earlier this month that it would raise prices
on several of stainless products effective May 6 to "support
continued growth and investment" (
amm.com, April 9).