For the first quarter 2013, net income from continuing operations attributable to ATI was US$9.7 million, on sales of US$1,099.0 million.
“As we began 2014, we were cautiously optimistic that business conditions would gradually improve as we move through the year,” said Rich Harshman, chairman, president and CEO.
“Our first quarter results and our near-term outlook are consistent with that view. While the first quarter was challenging, business conditions improved as the quarter progressed. As we enter the second quarter, we are seeing meaningful signs of continued improvement. Our backlog at US$1.8 billion is at its highest point in the last two years. Demand from the jet engine market is beginning to improve for both new builds and aftermarket spares. The oil and gas supply chain appears to be in better balance. The markets for flat-rolled stainless sheet and plate and grain-oriented electrical steel are improving and base price increases are being realized. In addition, demand from long-stalled project business is beginning to reappear.”
ATI’s sales of nickel-based alloys and specialty alloys increased 16% compared to the fourth quarter 2013 and represented 25% of first quarter 2014 ATI sales. Demand was flat for zirconium and related alloys and grain-oriented electrical steel from the nuclear energy and chemical process industry, and electrical power generation markets, respectively.
Aerospace demand
Operating profit in the High Performance Materials & Components segment was US$69.1 million, or 14.3% of sales. This was US$52 million higher than the fourth quarter 2013, as demand began to improve from the jet engine and airframe markets, and from the oil and gas market, ATI says.
“High Performance Materials & Components segment first quarter 2014 results continued to be negatively impacted by low operating rates at our Rowley, UT titanium sponge facility and by our strategic decision to use ATI-produced titanium sponge rather than lower cost titanium scrap to manufacture certain titanium products,” said Harshman.
“This is expected to continue throughout 2014. The Premium Qualification (PQ) program at Rowley remains on schedule. We have produced all of the sponge required as part of the qualification process and this sponge is now being melted into mill products for further processing. The Rowley facility is an important part of our long-term titanium products growth strategy. The facility is expected to provide ATI with a reliable, safe, and secure supply of high quality, competitive titanium sponge.”