Allegheny Technologies Incorporated (NYSE: ATI) reported net income for the second quarter 2012 of $56.4 million, or $0.50 per share, on sales of $1.36 billion. In the second quarter 2011, ATI reported net income of $64.0 million, or $0.59 per share, on sales of $1.35 billion.
For the six months ended June 30, 2012, net income was $112.6 million, or $1.00 per share, on sales of $2.71 billion. For the six months ended June 30, 2011, net income was $120.3 million, or $1.13 per share, on sales of $2.58 billion.
“Second quarter 2012 results were similar to those achieved in the first quarter 2012 in spite of a weakening global economy, demonstrating the benefit of ATI’s diversification strategy,” said Rich Harshman, Chairman, President and Chief Executive Officer. “We believe that the long-term secular growth trends in our key global markets remain intact. However, demand for many of our products in the second quarter was impacted by slower than expected GDP growth in the U.S. and China and fiscal and economic uncertainties in Europe. Revenue and operating margins were also impacted by falling prices for most raw materials.”
- ATI’s sales to the key global markets of aerospace and defense, oil and gas/chemical process industry, electrical energy, and medical represented 67% of ATI sales for the first six months of 2012:
- Sales to the aerospace and defense market were $851 million and represented 31% of ATI sales.
- Sales to the oil and gas/chemical process industry were $539 million and represented 20% of ATI sales.
- Sales to the electrical energy market were $316 million and represented 12% of ATI sales.
- Sales to the medical market were $114 million and represented 4% of ATI sales.
- Direct international sales were $974 million for the first six months of 2012 and represented nearly 36% ATI sales.
“The expected strong growth trend over the next 3 to 5 years in the commercial aerospace market remains on track,” said Mr. Harshman. “OEM backlogs remain at record levels and production rate ramps remain on schedule. However, we are now seeing some near-term softening in aftermarket spares demand due primarily to reduced profitability of the airlines and global economic uncertainty, which is negatively impacting business and consumer confidence. Overall, the supply chain appears to be in balance and inventory levels are being managed aggressively. We believe that this cautious approach is likely to result in a short-term pause in growth rates until the next step up in build rates.