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UPDATE 1-Allegheny Tech profit falls, sees 'trough' ahead
July 25, 2012 / 2:51 PM / 5 years ago

UPDATE 1-Allegheny Tech profit falls, sees 'trough' ahead

* Q2 earnings per share 50 cts vs Wall Street view 54 cts

* Sees demand hurt by slower 2H economic growth in U.S., China

* Stock down 0.2 percent (Adds more details, CEO comments, estimates, stock down)

July 25 (Reuters) - Metals processor Allegheny Technologies Inc reported a drop in quarterly profit and said third-quarter earnings would slip as slower-than-expected Chinese and U.S. growth and uncertainty in Europe were hurting demand.

Second-quarter results missed Wall Street expectations, and the company’s stock edged lower.

“Slower-than-expected economic growth in the U.S. and China, fiscal and economic uncertainties in Europe, fiscal and regulatory uncertainties in the U.S., and falling raw material costs create near-term headwinds for demand growth,” Chief Executive Officer Rich Harshman said in a statement.

He said Allegheny, which purchases metals from manufacturers and processes it for specific customer needs, expected third-quarter revenue and volume to suffer from summer slowdowns in many supply chains.

“As a result, we expect sales and earnings to trough in the third quarter,” said Harshman, without elaborating. Analysts currently expect a third-quarter profit of 68 cents per share and sales of $1.42 billion, according to Thomson Reuters I/B/E/S.

For the second quarter, Pittsburgh-based Allegheny reported net earnings of $56.4 million, or 50 cents per share, compared with $64 million, or 59 cents per share, a year earlier. Revenue was essentially flat at $1.36 billion.

Analysts on average were expecting earnings of 54 cents per share and revenue of $1.38 billion.

For the full year, Allegheny said it expected sales of $5.3 billion to $5.4 billion, which is below analysts’ estimates of $5.6 billion.

The company’s shares were down 0.2 percent at $28.58 in morning trading.

Reporting by Steve James in New York; Editing by Lisa Von Ahn

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