Steel Mills
ATI Q1 Results: A Net Loss But Better Than Expected
Written by David Schollaert
April 29, 2021
Allegheny Technologies Inc. posted a net loss of $7.9 million in the first quarter, with a slight recovery in jet engine production. First-quarter 2021 results are a vast improvement from the adjusted net loss of $41.9 million in the prior quarter, but a far cry from the pre-pandemic net income of $21.1 million in Q1 2020.
“Our first quarter financial results exceeded expectations, benefiting from the ongoing modest recovery in jet engine production, our aggressive 2020 cost cutting actions and a strong tailwind from nickel and other raw material prices,” said President and CEO Robert S. Wetherbee. “Despite our expected seasonal cash burn, our strong balance sheet and cash position ensure our ability to meet customer obligations and succeed in a challenging environment.”
ATI’s sales totaled $693 million in Q1 2021, up 5.3% quarter on quarter but down 27.5% when compared to the year prior. High Performance Materials & Components segment sales were $240.9 million, up 8.4% compared to the prior quarter, while Advanced Alloys & Solutions posted sales of $451.5 million, up 3.6%.
“We remain focused and on track with our strategic business transformation efforts within the Advanced Alloys & Solutions segment to exit production of low-margin standard stainless sheet products in 2021, while growing profitable specialty products revenues over time,” added Wetherbee. “It’s imperative that each of ATI’s business units stands on its own and has a cost structure that enables it to sustainably generate returns in excess of our cost of capital.”
Wetherbee didn’t disclose details on the month-long USW strike at ATI, but did assure investors, stakeholders and customers alike that production continues uninterrupted under their continuity plan. The strike that began on March 30 with union members seeking better labor practices, more generous wage increases, and healthcare benefits, remains at an impasse.
“While we are incredibly disappointed that the USW leadership decided to strike our Specialty Rolled Products locations beginning in late March, we remain committed to our business continuity plan to safely operate in a way that allows us to deliver to our customers on our quantity and quality commitments during this strike. Our operating teams are committed to minimizing the operational interruption and financial impact from the strike as we seek to reach a fair and equitable settlement with our striking workers,” Wetherbee said.
By David Schollaert, David@SteelMarektUpdate.com
David Schollaert
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