Titanium Metals Corporation
) posted earnings of 17 cents per share in the second quarter of
2012, down from the year-ago quarter's earnings of 18 cents. The
results were in line with the Zacks Consensus Estimate.
Revenues increased 3.6% to $281.7 million in the second quarter
from $272 million in the prior-year quarter, missing the Zacks
Consensus Estimate of $289 million. Higher selling prices due to
strong demand for titanium products within the commercial aerospace
sector led to the rise in sales in the quarter.
Costs and Margins
Cost of sales increased 5.5% over the prior-year quarter to
$220.7 million. As a percentage of sales, costs increased to 78.3%
in the reported quarter from 76.9% in the year-ago quarter. In the
reported quarter, gross profit was $61 million compared with $62.9
million in the year ago quarter, reflecting lower sales volume.
Selling, general and administrative expense increased 5.4% year
over year to $17.7 million.
Operating income in the reported quarter was $43.7 million
compared with $46.5 million (include a one-time gain of $2.1
million) in the year-ago quarter.
Melted product shipments of 1,470 metric tons reflect a 17.9%
decline from the last year's shipments of 1,790 metric tons.
Average selling price increased from $20.65 per kilogram to $22.55
per kilogram. Milled products shipments inched down 2.6% to 4,110
metric tons and product prices moved up 7.7% to $55.10 per
Moving ahead, Titanium Metals envisions continued growth in the
commercial aerospace sector over the long term as global fleet
replacement extension in developing regions such as Asia, the
Middle East and South America, support future titanium demand.
In order to meet the demand, the company has also initiated
several capital projects to increase melt capacity and improve
efficiency at certain facilities in the U.S. and abroad that are
expected to finish in two years.
Titanium remains confident of ensuring maximum return through
its cost efficient programs and manufacturing and raw material
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 #2 Rank, which translates into a short-term (1
to 3 months) Buy rating.
ALLEGHENY TECH (ATI): Free Stock Analysis
RTI INTL METALS (RTI): Free Stock Analysis
TITANIUM METALS (TIE): Free Stock Analysis
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