July 22, 2015
ATI Reports Loss in Second Quarter
Weak conditions in its flat-rolled market resulted in a second-quarter loss of $16.4 million for Allegheny Technologies, Inc., Pittsburgh. The decline in net income was a reversal of the $10 million the company earned in the first quarter, and was worse than the $3.8 million loss in second-quarter 2014.
“This was a challenging quarter due to business conditions in the Flat Rolled Products segment and further weakening in demand from the oil and gas market in the High Performance Materials and Components segment,” said Rich Harshman, chairman, president and CEO.
ATI’s net sales in the quarter totaled $1.02 billion, a 9.1 percent decline compared to the first quarter and down 8.6 percent from the same quarter in 2014. Net sales of $2.1 billion through the first half were up 1.9 percent from 2014.
The company’s flat-rolled sales were hurt by low-priced imports and distribution channel inventory reductions in response to falling base selling prices and raw material surcharges. Standard stainless sheet and plate shipment volume was down 13 percent compared to the first quarter and 23 percent compared to the second quarter of 2014. Sales of sheet products decreased by 20 percent and plate by 30 percent, the company said.
Flat Rolled Products segment results showed a loss of $3.4 million, the segment’s sixth quarterly operating loss over the last eight quarters. Base selling prices for standard stainless steel sheet products were pressured by a surge of low-priced imports, primarily from China, executives said. Raw material surcharges continued to fall, primarily due to lower prices for nickel.
Sales to the aerospace market grew nearly 12 percent in the first half compared to the same month last year, though second-quarter sales were down compared to the first quarter as supply chains replenished in the first quarter and customers kept inventories in line with projected build rates.
“In our Flat Rolled Products segment, we expect selling prices and demand for our standard stainless products to remain under pressure until raw material prices recover and the level of imports normalizes. High-value products sales are expected to weaken in the second half as new orders will not fully replace a large oil and gas pipeline project that benefitted first-half results,” Harshman said.