Titanium Metals Corporation
) posted earnings of 15 cents per share in the first quarter of
2012, down from the year ago earnings of 16 cents. The results
missed the Zacks Consensus Estimate by a penny.
Revenues increased 10% to $276.7 million from $252 million in
the prior year quarter, exceeding the Zacks Consensus Estimate of
$275 million. Strong demand for titanium products within the
commercial aerospace sector drove the prices and shipments, thus
increasing sales in the quarter.
Costs and Margins
Cost of sales increased 7.1% over the prior-year quarter to
$218.3 million. As a percentage of sales, costs decreased to 78.9%
in the reported quarter from 80.9% in the year-ago quarter. In the
reported quarter, gross profit was $58.4 million compared with
$48.2 million in the year ago quarter, reflecting higher sales
volume. Selling, general, and administrative expense increased
16.2% year over year to $17.2 million.
Operating income, in the reported quarter, was $42.1 million
compared with $45 million (include a one time gain of $10.6
million) in the year ago quarter. However, after excluding the one
time gain recorded in first-quarter 2011, operating income in the
reported quarter jumped 22%. Higher prices coupled with the
company's measures to improve its manufacturing processes
contributed to the increase.
Melted product shipments of 1,475 metric tons decreased 13.4%
from the last year's shipments of 1,495 metric tons. Average
selling price increased from $20.80 per kilogram to $22.95 per
kilogram. However, milled products shipments inched up 2.2% to
3,995 metric tons and product prices moved up 5.4% to $54.85 per
Moving ahead, Titanium Metals envisions aircraft deliveries to
remain strong over the long term as fuel efficiency and extension
of the global fleet in developing regions such as Asia, the Middle
East and South America, support future demand.
We currently have a long-term Neutral recommendation on Titanium
Metals. The company, which competes with
Allegheny Technologies Inc
RTI International Metals, Inc.
),maintains a Zacks #4 Rank, which translates into a short-term (1
to 3 months) Sell rating.
ALLEGHENY TECH (ATI): Free Stock Analysis
RTI INTL METALS (RTI): Free Stock Analysis
TITANIUM METALS (TIE): Free Stock Analysis
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