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Titanium Opens Facility in France - Analyst Blog

By: Zacks.com
Posted: 3/29/2012 9:15:00 AM
Referenced Stocks: ATI;ESD;RTI;TIE

Titanium Metals Corporation ( TIE ) announced that it has opened a new European Service & Distribution ( ESD ) facility in Ugine, France. The facility, which will store largest and different varieties of mill product inventory in Europe, will cater to the international market and are customized to meet any specific requirement of the Original Equipment manufacturers (OEMs).

The ESD is expected to meet the needs of titanium in the aerospace, medical and industrial markets and will have a centre attending customer queries in different languages. It will also be the major distributor for Titanium Metals in Europe.

Titanium Metals released its fourth-quarter 2011 results on February 2012. The company reported net earnings of $28.6 million or 16 cents per share in the fourth quarter of 2011, which was in line with the Zacks Consensus Estimate. However, earnings were ahead of the prior-year level of $23.3 million or 13 cents per share. In fiscal 2011, net earnings were $114.0 million or 64 cents per share, up significantly from $80.6 million or 45 cents per share in fiscal 2010.

Revenues in the quarter increased 19.1% year over year to $258.7 million. However, it missed the Zacks Consensus Estimate of $276 million. The year-over-year increase in revenues was primarily driven by a rise in sales volumes for both melted and mill products, primarily reflecting improved demand for titanium products in the commercial aerospace sector along with increased shipments of industrial products. In fiscal 2011, net sales were $1,045.2 million versus $857.2 million in fiscal 2010. 

Titanium Metals has been successful over the last several years in establishing significant flexibility and cost advantages in its entire manufacturing process. During the fourth quarter of 2011, the company has acquired certain assets, intellectual property and know-how in order to enhance its production capacities and capabilities while extending its product technology.

We believe the company's fiscal background and industry experience has allowed it to manage its production rates and costs effectively while investing capital conservatively and maintaining a strong and debt-free balance sheet. Further, the company's operating flexibility position it well to take advantage of opportunities for strengthening and expanding its presence in key markets.

Titanium Metals competes with Allegheny Technologies Inc. ( ATI ) and RTI International Metals, Inc. ( RTI ). Currently, it has a Zacks #2 Rank, which translates to a short-term (1 to 3 months) "Buy" rating.


 
ALLEGHENY TECH ( ATI ): Free Stock Analysis Report
 
RTI INTL METALS ( RTI ): Free Stock Analysis Report
 
TITANIUM METALS ( TIE ): Free Stock Analysis Report
 
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