Shares of Allegheny Technologies fell 6 percent Wednesday after the Pittsburgh specialty metals producer reported fourth quarter and full year results muddled by a gain from an asset sale that was offset by restructuring and inventory-related charges.
The company said the sale of its tungsten materials business to Kennametal generated a one-time after-tax gain of $261.4 million, or $2.45 per share. But one-time charges and weak business conditions resulted in a fourth-quarter profit of $173.4 million, or $1.62 per share. That still was more than the company earned for all of 2013.
Sales totaled $915.3 million.
ATI said it lost $83.8 million from continuing operations versus a $16 million profit in the same quarter a year earlier. The company cited the restructuring and inventory charges as well as weak demand, lower selling prices and higher raw materials costs.
In the year-ago quarter, Allegheny reported net income of $10.5 million, or 10 cents per share, on sales of $1.02 billion.
For all of 2013, the company reported net income of $154 million, or $1.44 per share, on sales of $4.04 billion versus 2012 earnings of $158.4 million, or $1.49 per share, and sales of $4.67 billion.
The one-time, after-tax charges totaled $75.1 million, or 71 cents per share. They included $67.5 million for restructuring: $59.3 million for asset impairments and $8.2 million for severance and other costs for closing its Wallingford, Conn., plant.
Allegheny Technologies shares closed Wednesday at $32.01, down $2.17.
Chairman, president and CEO Rich Harshman said business conditions appeared to stabilize at the end of the year and that the company is seeing early signs of modest growth in demand.
"We begin the year cautiously optimistic that business conditions will gradually improve as we move through 2014," Mr. Harshman said in a prepared statement.
On a conference call with analysts Wednesday, Mr. Harshman said more significant growth lies beyond this year and that, for the time being, customers remain cautious.
"There's really nobody getting ahead of the market in terms of building inventory," he said.
Mr. Harshman said the commissioning of a new rolling and processing plant in Brackenridge has begun and will continue through most of 2014. He expects the plant will be producing all of the company's flat-rolled products by the end of the year.
"We're very encouraged with what we've seen so far," he said, calling it "a game-changing investment."
Len Boselovic: email@example.com or at 412-263-1941.
Len Boselovic: firstname.lastname@example.org or 412-263-1941. First Published January 22, 2014 9:05 AM