(RTTNews) - Specialty metals producer Allegheny Technologies Inc. (ATI: News ) on Wednesday reported a profit for the third quarter that plunged from last year, hurt by drop in shipments amid reduced global demand for metals as well as lower raw material surcharges. Earnings per share for the quarter also missed analysts' expectations by two cents.

Quarterly sales halved and missed consensus estimate, with high double-digit drop in sales recorded across all the segments. The company also said it anticipates earnings performance for the fourth quarter to be similar to the third quarter.

In a statement, chairman, president and chief executive officer, Patrick Hassey said, "We are having success in the marketplace by developing and expanding strategic relationships with key global customers, and we are well positioned to meet their growing needs as economic conditions improve and our core markets recover. During the third quarter, we completed several new long-term agreements (LTAs) with key global customers. We are working on several more."

Third Quarter Results

The Pittsburgh, Pennsylvania-based company reported net income of $1.4 million or $0.01 per share for the third quarter, sharply lower than $144.1 million or $1.45 per share in the prior-year quarter.

On average, twelve analysts polled by Thomson Reuters expected the company to report earnings of $0.03 per share for the third quarter. Analysts' estimates typically exclude special items.

Sales for the quarter halved to $697.6 million from $1.39 billion in the same quarter last year, and missed nine Wall Street analysts' consensus estimate of $738.51 million. The plunge in sales was attributed to lower raw material surcharges and indices, as well as lower shipments.
Among Allegheny's peers, Wyomissing, Pennsylvania-based Carpenter Technology Corp. (CRS: News ) is slated to report financial results for the first quarter on October 27, 2009. Analysts expect the company to report a loss of $0.23 per share for the quarter, on revenues of $240.50 million.

Segmental Details

Direct international sales represented 31.0% of total sales, compared to 29% of sales in the same quarter last year, benefiting from the company's global reach. Compared to the third quarter 2008, sales dropped 45% in the high performance metals segment, plunged 52% in the Flat-rolled products segment, and was down 54% in the engineered products segment.

Allegheny's high performance metals sales for the third quarter dropped to $279.2 million from $510.2 million in the prior-year quarter. Shipments decreased 37% for both titanium and titanium alloys as well as for nickel-based and specially alloys. Average selling prices also declined 23% for titanium and titanium alloys and 21% for nickel-based and specialty alloys. However, Average selling prices for exotic alloys increased 23% due to increased demand for certain products. Segment operating profit was $51.3 million, or 18.4% of sales, down from $139.6 million or 27.4% of sales, in the prior-year quarter, due to lower shipments and selling prices for most of the company's products.

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