Allegheny Tech (ATI – Analyst Report) negatively preannounced their Q215 forecast due to difficult conditions for their Flat Rolled Products, and in the oil and gas markets as well. Further, declining nickel prices, and high imports of Asian stainless steel were additional headwinds for the company. To compound matters, these conditions do not appear to be alleviated anytime soon. Due to these negative factors, Allegheny Tech is the Zacks Bear of the Day.
This Zacks Rank #5 (Strong Sell) company produces and sells specialty materials and components worldwide. The company operates through two segments, High Performance Materials and Components; and Flat-Rolled Products. The High Performance Materials and Components segment provides various high performance materials, including titanium and titanium-based alloys; nickel-and cobalt-based alloys. The Flat-Rolled Products segment offers stainless steel, nickel-based alloys, specialty alloys, and titanium and titanium-based alloys in various product forms comprising plates, sheets, engineered strips, and precision rolled strip products, as well as grain-oriented electrical steel sheets. This segment serves oil and gas, chemical process industry, electrical energy, automotive, food processing equipment and appliances, construction and mining, electronics, communication equipment and computers, and aerospace and defense markets. The company sells its products through direct sales and independent representatives.
In their most recent earnings report, the company saw a net loss of $16.4 million. Management stated that the “Results were adversely affected by lower demand in both the Flat Rolled Products and High Performance Materials and Components segments. Sales declined 9% compared to the first quarter 2015.” Rich Harshman, CEO commented on the results stating, “This was a challenging quarter due to business conditions in the Flat Rolled Products segment and further weakening in demand from the oil & gas market in the High Performance Materials and Components segment “
Estimates Graph
As you can see in the Price and Consensus Estimates graph below, the estimates have been trending downwards for sometime now.
