Allegheny Technologies Expects $142 Mln - $148 Mln Loss In Q3

(RTTNews) - Allegheny Technologies Incorporated (ATI) said that it expects to report a net loss attributable to ATI of $142 million to $148 million, or $1.32 to $1.38 per share for the third quarter. Excluding the non-cash NRV inventory reserve and income tax valuation charges, ATI's third quarter net loss attributable to ATI is expected to be $29 million to $34 million, or $0.27 to $0.32 per share. Analysts polled by Thomson Reuters expected the company to report a loss of $0.22 per share for the third-quarter. Analysts' estimates typically exclude special items.

Due primarily to the effects of rapid declines in current and projected raw material values, particularly for nickel that is near decade-low exchange-determined prices, ATI also expects to report the certain items in its third quarter results: A LIFO inventory valuation benefit of approximately $76 million, pretax; An offsetting $76 million pretax non-cash charge for Net Realizable Value (NRV) inventory reserves, which are required to offset ATI's aggregate net debit LIFO inventory balance that exceeds current inventory replacement cost; A non-cash charge for income tax valuation allowances of approximately $65 million, net of tax, as a result of a three year cumulative loss from U.S. operations.

ATI's third quarter performance continued to be pressured by the ATI Flat Rolled Products segment. Business conditions in this segment remained challenging. Stainless steel demand was soft mainly due to unusually high domestic inventory levels that resulted from the first-half 2015 surge of low-priced imports, primarily from China, and generally weak demand which is affected by falling raw material surcharges. Demand from the oil & gas market continued to deteriorate during the quarter.

In the High Performance Materials and Components segment, weakened demand from the oil & gas market continued to negatively impact results. Third quarter sales to the aerospace market were lower than the previous quarter due to seasonal demand, primarily in Europe, as well as the rapid decline in the value of raw materials, particularly for nickel.