LOS ANGELES RTI
International Metals Inc.s profits skyrocketed in the
third quarter due in part to falling scrap prices, with the
company saying it sees its raw material costs dipping further
titanium producer, fabricator and distributor posted net income
of $12.3 million for the three months ended Sept. 30, more than
triple its net income of $3.6 million in the same period last
year, on net sales that increased 7.1 percent to $196.5
group was able to "take advantage" of lower scrap costs during
the quarter, vice chairwoman, president and chief executive
officer Dawne S. Hickton said during an earnings conference
Senior vice president
and chief financial officer William T. Hull said RTI realized
$6.8 million in raw material cost savings in the quarter
compared with last year.
Hickton declined to
reveal how much RTIs scrap usage has risen in relation to
its alternative raw material, sponge. But she acknowledged that
"you can assume" the company is using more scrap and less
sponge this year compared with 2012.
RTI, the only one of
the three major U.S. titanium producers that does not have its
own sponge capacity, purchases sponge primarily from Japan.
Hickton said RTI met with its sponge suppliers last month at
the annual meeting of the International Titanium Association in
Las Vegas, and expects its raw material costs next year to be 5
percent lower than in 2013. She didnt disclose, however,
RTIs sponge costs in 2014 or how much sponge it intends
to purchase next year.
earnings came despite a 4.8-percent decline in titanium mill
product shipments in the quarter to 4 million pounds from 4.2
million pounds in the year-ago period and a 2.3-percent dip in
their average price to $18.57 per pound from $19.01 per
titanium business segment recorded operating income of $16.8
million in the quarter, nearly triple from $5.5 million last
year on sales that dipped 0.5 percent to $89.7 million from $90
million last year. Helping to offset the flat year-over-year
overall sales were higher European service center sales to
European commercial aerospace customers, which RTI attributed
to "order timing."
products and services segment, which includes its fabrication
operations, posted operating income of $4.7 million in the
quarter, up 26.3 percent from $3.7 million last year on sales
that rose 7.7 percent to $121 million from $112.3 million.
In addition to the raw
material savings, RTIs bottom line benefited from duty
drawbacks on titanium that exceeded their normal run rate by
$2.5 million. Hull said drawbacks are expected to revert to
their normalized rate in the fourth quarter.
operating results included a $2.4 million charge related to a
previously disclosed transformer fire at the RTI Alloys melting
facility in Canton, Ohio (
amm.com, Oct. 31, 2012).