How The Wheels Came Off Allegheny Technologies' Bus

Seth Jayson, The Motley Fool
Updated

Allegheny Technologies (NYS: ATI) reported earnings on Jan. 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Allegheny Technologies missed on revenue and whiffed on earnings per share.

Compared to the prior-year quarter, revenue grew significantly, and earnings per share improved significantly.

Margins expanded across the board.

Revenue details
Allegheny Technologies notched revenue of $1.3 billion. The eight analysts polled by S&P Capital IQ expected sales of $1.3 billion. Sales were 21% higher than the prior-year quarter's $1.0 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.31. The 10 earnings estimates compiled by S&P Capital IQ anticipated $0.54 per share on the same basis. GAAP EPS of $0.29 for Q4 were 81% higher than the prior-year quarter's $0.16 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 13.5%, 120 basis points better than the prior-year quarter. Operating margin was 5.7%, 200 basis points better than the prior-year quarter. Net margin was 2.5%, 100 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.4 billion. On the bottom line, the average EPS estimate is $0.72.

Next year's average estimate for revenue is $5.8 billion. The average EPS estimate is $3.64.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 1,050 members out of 1,107 rating the stock outperform, and 57 members rating it underperform. Among 324 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 318 give Allegheny Technologies a green thumbs-up, and six give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Allegheny Technologies is outperform, with an average price target of $61.42.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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