Metals processor Allegheny to shed loss-making units
Oct 14 (Reuters) - Metals processor Allegheny Technologies Inc plans to shed two businesses and will report a loss for the third quarter, stung by a decline in shipments of metal products and higher raw material costs.
Allegheny said it had closed its fabricated components business and planned to divest its iron castings unit, part of a wider cost-cutting initiative that includes the sale of its tungsten business.
Pittsburgh-based Allegheny, which supplies specialty metals to sectors including aerospace, defense and oil and gas, estimated a loss of about 27 cents to 30 cents per share from its continuing operations for the third quarter ended Sept. 30.
The loss will include a 4-cent benefit from taxes, the company said.
Revenue from continuing operations is expected to be $970 million, it said. Analysts on average were expecting revenue of about $1.15 billion from its operations, according to Thomson Reuters I/B/E/S.
"Challenging conditions continued during the third quarter," said Rich Harshman, the company's chairman and chief executive.
Shipments of high-performance metals were affected by jet engine destocking, he said, while global economic uncertainty led to a slowdown in demand for industrial titanium, as well as nickel-based and specialty alloy sheet and plate.
From the third quarter, the company will consider its fabricated components and iron castings businesses as discounted operations. They contributed a combined $10 million in revenue and made a loss in the first six months of the year.
The tungsten business, which Allegheny agreed last month to sell to Kennametal Inc for $605 million, will also be considered as discontinued for the third quarter.
Allegheny is scheduled to report third-quarter results on Oct. 23.
The company's shares were down 1 percent at $30.55 on the New York Stock Exchange on Monday morning.