- Metals processor Allegheny Technologies Inc (ATI) said on Thursday it expects third-quarter and full-year earnings to be lower than Wall Street estimates because of soft demand for stainless steel sheet.
- Full-year 2007 earnings will range from $7 to $7.25 per share, with third-quarter earnings of $1.85 to $1.88 per share, the Pittsburgh-based company said. Analysts currently expect $1.96 in the third quarter and $7.96 for the full year, according to Reuters Estimates.
- Allegheny Technologies anticipates lower earnings for the second half of 2007 because of higher inventories at certain mills and depots and volatile raw material costs.
- "The softness in demand for standard stainless sheet appears to be bottoming out and inventory levels at distributors are low by historic measures," Chief Executive Officer Patrick Hassey said in a statement.
- However, Hassey said the longer-term outlook was strong. "We see continuing growth in demand for our high-value products from the global aerospace and defense, chemical process industry, oil and gas, and electrical energy markets."
- Shipments under long-term agreements in these markets should continue to grow over the next several years, the company said. It does not anticipate a significant impact from the recently announced delay in the Boeing 787 Dreamliner schedule.
Takeaway: Still like this name for the long run, but probably will be a flat line in the near term. With the stock around $95 in after hours, I'll see if we can get a bounce in the name over the next few days in the mid to upper $90s and than exit this position for now, and revisit at a later date. The chart looked fine, until 4:30 PM :) Due to the small size of the position, it won't have much impact on fund results.
Long Allegheny Technologies in fund; no personal position
