ATI CEO says 'on track' to deliver improved results for remainder of 2019
"While our first quarter sales increased to $1 billion, our financial results were below our expectations as we faced unexpected operational headwinds in both of our business segments," said Robert S. Wetherbee, ATI President and Chief Executive Officer. "We are working proactively to address challenges we faced in the form of short-term powder billet shortages and higher operating costs by ramping up our own production to offset future uncertainty. The company holds strong positions in high-value, growing markets, and the overall fundamentals of our businesses are solid. We are on track to deliver improved results in the second quarter and throughout the balance of 2019, and progress toward our longer-term objectives remains on pace.HPMC segment results were negatively impacted by the ongoing disruption in third party nickel powder billet supply, as well as the related operating costs to qualify materials and quickly ramp nickel powder production to help alleviate the shortage of incoming third-party powder billet. Segment results were also adversely impacted by the temporary margin compression caused by a recent steep and rapid drop in cobalt prices. Our STAL JV extended its production downtime for the Lunar New Year holiday period as a result of lower domestic demand in China, which is in part related to the current trade tensions between the U.S. and China. This lower demand, coupled with increased operating costs for the newly expanded STAL JV production facilities, resulted in lower than expected first quarter profitability."