Allegheny Technologies, Inc. is a specialty metals company headquartered in Pittsburgh, Pennsylvania in the United States. Allgheny Technologies is one of the largest and most diversified specialty metals producers in the world with revenue of $3.0 billion in 2009. ATI's key markets are aerospace and defense, oil & gas, chemical process industry, electrical energy, and medical. Products are titanium and titanium alloys, nickel-based alloys and superalloys, grain-oriented electrical steel, stainless and specialty steels, zirconium, hafnium, and niobium, tungsten materials, forgings and castings. ATI began a strategic transformation in 2004. The Company has self-funded approximately $1.8 billion in capital investments between 2004 and 2009 and now believes it has world's newest and most advanced processing paths for its specialty metals, particularly for titanium and titanium alloys, nickel-based alloys and superalloys, zirconium and hafnium, and other specialty alloys.
The company which has developed to become Allegheny Technologies was formed by the combination of Allegheny Ludlum Corporation and Teledyne, Inc. on August 15, 1996. The company has since spun off several subsidiaries as independent public companies such as Teledyne Technologies, Inc. and WaterPik Technologies in 1999, to concentrate on its core business of metal and alloy production. It also sold its World Minerals subsidiary to French company Imerys in 2005.
Distribution Strategy
Aerospace and Defense = Allegheny Technologies are a world leader in the production of premium titanium alloys, nickel-based and cobalt-based alloys and superalloys, and vacuum-melted specialty alloys used in the manufacture of both commercial and military jet engines, as well as replacement parts for those engines. We also produce titanium alloys, vacuum-melted specialty alloys, and high-strength stainless alloys for use in commercial and military airframe components.
Chemical Process Industry and Oil and Gas = Allegheny Technologies poduce metals that are critical to the chemical process industry and oil and gas industry. Our specialty metals, including titanium and titanium alloys, nickel-based alloys, stainless steel alloys and other specialty alloys, have the strength and corrosion resistant properties necessary in the chemical process industry, and global demand for these materials has been increasing, particularly in rapidly growing industrial markets in Asia. We also provide advanced specialty metals used in offshore oil and gas production, including offshore piping systems and subsea oil and gas fields.
Electrical Energy = Allegheny Technologies Coal-fired power plants account for more than one-half of the electricity produced in the United States. Under the Clean Air Interstate Rule adopted by the U.S Environmental Protection Agency (EPA), power plants in several eastern states will be required, in stages through 2015, to dramatically reduce emissions of sulfur dioxide and nitrous oxide generated from the burning of coal. Most of these plants will be required to install additional filtration systems, or “scrubbers”, which are made of specialty metals we produce, on their smokestacks to comply with the rule. Demand for our specialty metals for pollution control systems is also significant in growing industrial economies, including China. We supply a broad range of alloys, including many proprietary alloys, for these applications. AL-6XN® alloy, a 6-molybdenum super-austenitic alloy, is used in absorber towers, piping, damper doors, ducting and vessels. The nickel-based AL 22™ and AL 276™ alloys are used in the absorber inlet, absorber outlet ducting, damper door seals, and expansion joints.
Medical = Allegheny Technologies advanced specialty metals are used in medical device products that save and enhance the quality of lives. Our zirconium-niobium, titanium-and cobalt-based alloys are used for knees, hips and other prosthetic devices. These replacement devices offer the potential of lasting much longer than previous implant options. Our biocompatible nickel-titanium shape memory alloy is used for stents to support collapsed or clogged blood vessels. Reduced in diameter for insertion, these stents expand to the original tube-like shape due to the metal’s superelasticity. Our ultra fine diameter (0.002 inch/0.051 mm) titanium wire is used for screens to prevent blood.
This all enhances there distribution channels
Our recently acquired powder metals business is a supplier of nickel-based superalloy powder products for use in jet engines and other critical applications. Advanced powder metal engineered products are preferred for certain near-net-shape parts that require complex alloy chemistries.
Our specialty alloys include vacuum-melted maraging steels used in the manufacture of aircraft landing gear and structural components, as well as jet engine components.
ATI also offers tungsten cutting tools and machining solutions for difficult-to-machine specialty metals, such as titanium alloys, nickel-based superalloys, and specialty alloys used in airframe, jet engine, and armor applications.
Allegheny Technologies Incorporated expects second quarter 2008 earnings to be in the range of $1.65 to $1.67 per share, including a $0.11 per share one-time net tax benefit. ATI had previously said that it expected second quarter earnings to be somewhat higher than the $1.40 per share achieved in the first quarter 2008.
While the company remained profitable in the fourth quarter, it is not immune from the weak market conditions. Hassey said three major events are posing a challenge for the company as 2009 begins: the continuing credit crisis freezing new-project lending in some of markets; the uncertainty of the global recession and the resulting lack of forward visibility for customers; and the short-term impact of the precipitous drop in primary metal prices during the fourth quarter 2008. All of these factors are expected to negatively affect the company’s earnings in the first quarter, he said.
The declines in raw material costs during the fourth quarter were unprecedented, Hassey said. Nickel dropped 46 percent from September to December, while chromium fell 51 percent, molybdenum fell 71 percent, iron units were down 59 percent and titanium scrap was off 15 percent. As a result of these declines, surcharges to selling prices will be significantly lower in the first quarter. The surcharge on 304 stainless will decline more than $1 to 41 cents.
“This serious drop in raw materials represents a significant mismatch between raw material costs and the surcharge selling price due to our manufacturing cycles between melt and finishing,” Hassey said. “We expect this mismatch to negatively impact first-quarter results by approximately $70 million.”
Much of the difference between the two prices would ordinarily have been absorbed during the fourth quarter, but the drop in volume prevented such an occurrence. With this anticipated loss, the company believes ATI’s first-quarter results will be “at or near break-even,” Hassey said.
Most of the expected hit will be felt in the company’s flat-roll division, which has the bleakest outlook of any of its segments. Demand from markets related to consumer spending is down across the board, and service center customers are expected to continue to order only on an “as-needed basis.”
The company which has developed to become Allegheny Technologies was formed by the combination of Allegheny Ludlum Corporation and Teledyne, Inc. on August 15, 1996. The company has since spun off several subsidiaries as independent public companies such as Teledyne Technologies, Inc. and WaterPik Technologies in 1999, to concentrate on its core business of metal and alloy production. It also sold its World Minerals subsidiary to French company Imerys in 2005.
Distribution Strategy
Aerospace and Defense = Allegheny Technologies are a world leader in the production of premium titanium alloys, nickel-based and cobalt-based alloys and superalloys, and vacuum-melted specialty alloys used in the manufacture of both commercial and military jet engines, as well as replacement parts for those engines. We also produce titanium alloys, vacuum-melted specialty alloys, and high-strength stainless alloys for use in commercial and military airframe components.
Chemical Process Industry and Oil and Gas = Allegheny Technologies poduce metals that are critical to the chemical process industry and oil and gas industry. Our specialty metals, including titanium and titanium alloys, nickel-based alloys, stainless steel alloys and other specialty alloys, have the strength and corrosion resistant properties necessary in the chemical process industry, and global demand for these materials has been increasing, particularly in rapidly growing industrial markets in Asia. We also provide advanced specialty metals used in offshore oil and gas production, including offshore piping systems and subsea oil and gas fields.
Electrical Energy = Allegheny Technologies Coal-fired power plants account for more than one-half of the electricity produced in the United States. Under the Clean Air Interstate Rule adopted by the U.S Environmental Protection Agency (EPA), power plants in several eastern states will be required, in stages through 2015, to dramatically reduce emissions of sulfur dioxide and nitrous oxide generated from the burning of coal. Most of these plants will be required to install additional filtration systems, or “scrubbers”, which are made of specialty metals we produce, on their smokestacks to comply with the rule. Demand for our specialty metals for pollution control systems is also significant in growing industrial economies, including China. We supply a broad range of alloys, including many proprietary alloys, for these applications. AL-6XN® alloy, a 6-molybdenum super-austenitic alloy, is used in absorber towers, piping, damper doors, ducting and vessels. The nickel-based AL 22™ and AL 276™ alloys are used in the absorber inlet, absorber outlet ducting, damper door seals, and expansion joints.
Medical = Allegheny Technologies advanced specialty metals are used in medical device products that save and enhance the quality of lives. Our zirconium-niobium, titanium-and cobalt-based alloys are used for knees, hips and other prosthetic devices. These replacement devices offer the potential of lasting much longer than previous implant options. Our biocompatible nickel-titanium shape memory alloy is used for stents to support collapsed or clogged blood vessels. Reduced in diameter for insertion, these stents expand to the original tube-like shape due to the metal’s superelasticity. Our ultra fine diameter (0.002 inch/0.051 mm) titanium wire is used for screens to prevent blood.
This all enhances there distribution channels
Our recently acquired powder metals business is a supplier of nickel-based superalloy powder products for use in jet engines and other critical applications. Advanced powder metal engineered products are preferred for certain near-net-shape parts that require complex alloy chemistries.
Our specialty alloys include vacuum-melted maraging steels used in the manufacture of aircraft landing gear and structural components, as well as jet engine components.
ATI also offers tungsten cutting tools and machining solutions for difficult-to-machine specialty metals, such as titanium alloys, nickel-based superalloys, and specialty alloys used in airframe, jet engine, and armor applications.
Allegheny Technologies Incorporated expects second quarter 2008 earnings to be in the range of $1.65 to $1.67 per share, including a $0.11 per share one-time net tax benefit. ATI had previously said that it expected second quarter earnings to be somewhat higher than the $1.40 per share achieved in the first quarter 2008.
While the company remained profitable in the fourth quarter, it is not immune from the weak market conditions. Hassey said three major events are posing a challenge for the company as 2009 begins: the continuing credit crisis freezing new-project lending in some of markets; the uncertainty of the global recession and the resulting lack of forward visibility for customers; and the short-term impact of the precipitous drop in primary metal prices during the fourth quarter 2008. All of these factors are expected to negatively affect the company’s earnings in the first quarter, he said.
The declines in raw material costs during the fourth quarter were unprecedented, Hassey said. Nickel dropped 46 percent from September to December, while chromium fell 51 percent, molybdenum fell 71 percent, iron units were down 59 percent and titanium scrap was off 15 percent. As a result of these declines, surcharges to selling prices will be significantly lower in the first quarter. The surcharge on 304 stainless will decline more than $1 to 41 cents.
“This serious drop in raw materials represents a significant mismatch between raw material costs and the surcharge selling price due to our manufacturing cycles between melt and finishing,” Hassey said. “We expect this mismatch to negatively impact first-quarter results by approximately $70 million.”
Much of the difference between the two prices would ordinarily have been absorbed during the fourth quarter, but the drop in volume prevented such an occurrence. With this anticipated loss, the company believes ATI’s first-quarter results will be “at or near break-even,” Hassey said.
Most of the expected hit will be felt in the company’s flat-roll division, which has the bleakest outlook of any of its segments. Demand from markets related to consumer spending is down across the board, and service center customers are expected to continue to order only on an “as-needed basis.”
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