) has extended its long-term alliance with aircraft maker
The Boeing Company
). The Pennsylvania-based metals processor said that it has
expanded its titanium products supply pact with the aerospace
giant. The terms of the deal, however, were not divulged.
ALLEGHENY TECH (ATI): Free Stock Analysis
BOEING CO (BA): Free Stock Analysis Report
SHILOH INDS INC (SHLO): Get Free Report
CIA SIDERUR-ADR (SID): Free Stock Analysis
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The extended agreement covers value-added titanium mill products
and offers opportunity for increased use of Allegheny's
next-generation and advanced titanium alloys in both long product
and flat-rolled product forms. The agreement reinforces the
company's relationship with Boeing and underscores the increasing
needs to offer enabling technology and value-added titanium
products. The expanded deal will allow Allegheny to participate
in Boeing's significant growth over the next several years.
Allegheny sees a loss in the third quarter of 2013 due to a host
of headwinds including challenging business environment, lower
shipments of several key products, higher raw material costs and
pricing pressure. The company is also restructuring its
Engineered Products segment as part of its efforts to focus more
on its strategic businesses.
Allegheny should benefit from its new alloys and products,
diversified global growth markets and differentiated product mix.
The company is in the process of finishing several self-funded
capital projects, including the $1.2 billion Hot-Rolling and
Processing Facility (HRPF), which would help augment organic
Allegheny continues to improve its cost structure with its gross
cost reduction initiative. The company should gain from healthy
demand across aerospace, oil, electrical energy and medical
industries. It is seeing improving demand from aerospace OEMs.
However, Allegheny is contending with a soft economy and raw
material cost pressures. Reduced raw material surcharges and low
base prices of standard stainless products are hurting the
results of its key Flat-Rolled Products segment. The business
environment is expected to remain challenging through the
remainder of 2013 given the uncertain economic backdrop.
Allegheny, which currently holds a Zacks Rank #4 (Sell), will
report its third quarter results on Oct 23.
Other companies in the basic materials sector with favorable
Zacks Rank are
Companhia Siderurgica Nacional
Shiloh Industries Inc.
) with both retaining a Zacks Rank #1 (Strong Buy).