Earnings Results
- Adjusted Earnings Per Share (EPS): $0.48 for Q1, surpassing expectations.
- Revenue: Exceeded $1 billion for the seventh consecutive quarter.
- Advanced Alloys & Solutions Segment EBITDA margin: 14% in Q1, indicating double-digit sequential growth in electronics and medical markets, and strong Aerospace & Defense (A&D) sales in Specialty Rolled Products.
- High Performance Materials & Components Segment: Experienced a downturn in the first quarter due to late year production outages but is expected to improve with ramping melt rates and new billet forge press capacity.
- Forge Products Business Unit: Reported the highest revenue in their history for the second consecutive quarter.
- Working Capital Management: Significant first-quarter improvements led to better free cash flow over the prior year’s first quarter.
- Share Repurchase: Fully executed with $150 million, evidencing the commitment to shareholder returns.
Future Guidance
- EPS Guidance for 2024: Increased to a range of $2.30 to $2.60 per share, reflecting strong demand, improved operational stability, and a healthy pricing environment.
- Second Quarter Adjusted EPS Estimate: Ranging from $0.54 to $0.60.
- Second Quarter Adjusted EBITDA Estimate: Expected to be between $170 million and $180 million.
- Full Year Adjusted EBITDA for 2024: Forecasted to be in the range of $700 million to $750 million.
- Free Cash Flow for 2024: Updated range is $260 million to $340 million, indicating an 82% increase from 2023.
Trends, Market Conditions, Sentiment
- Aerospace and Defense Demand: Remains robust with ATI poised to benefit from the broad and diverse market position across commercial airframe and jet engine programs despite the 737 MAX challenges.
- Industrial Demand: Expected recovery in the second half of the year, with early positive signals especially from oil and gas.
- Wide-body Aircraft Demand: Increasing, offering growth opportunities for ATI due to higher titanium content in these aircraft types.
- Operational Improvements: ATI continues to improve operational capabilities with new investments like a 12,500-ton billet press for nickel and titanium, and expansion in ultrasonic inspection capacity.
- Market Strategy: Focused on diversified growth across all major OEM aircraft and engine programs, leveraging ATI’s differentiated capabilities in premium products.
Notable Quotes
- Robert Wetherbee: “ATI has proven to perform and well positioned for the future.”
- Kim Fields: “Bottom line, we have strong customer demand across our markets.”
- Donald Newman: “We are not changing our CapEx range. It remains at $190 million to $230 million.”
These remarks encapsulate the optimistic outlook of the company amidst robust demand in its core aerospace and defense markets, alongside an anticipated recovery in industrial demand, signaling a strong year ahead for ATI.