Earnings Preview: Allegheny Technologies

Allegheny Technologies (ATI) is expected to report Q2 earnings before market open Wednesday, July 23, with a conference call scheduled for 1:00 pm ET.

Guidance

The consensus estimate is $1.54 for EPS and $1.41B for revenue, according to First Call. The last guidance that was provided by management was on the Q1 earnings call back in April. At that time, management said they believed Q1 earnings represented the "bottom." In regards to Q2 guidance, no figures were provided on that call, but management made the statement that they saw Q2 earnings "somewhat higher" than Q1. Later, the company did pre-announce solid Q2 EPS of $1.54 to $1.56, which includes a 11c one-time tax benefit.

Analyst Views

The shares over the past few months have been buoyed around by the overall economy effecting the markets and renewed & unconfirmed buyout chatter. Citigroup said that near-term headwinds have been that the Specialty Alloys continue to face headline risk from aerospace stretch-outs, but benefit from exceptional long-term fundamentals. Citigroup believes Q3 will likely see typical softness due to European seasonality and weakness in the U.S. auto, housing and appliance market.

Key issues for the conference call: Commentary on the order book will be particularly important, and commodity Stainless volumes, which need to be above 700M lbs to support the margin structure in the more-lucrative High Performance Metals segment.