ATI Shares Drop 5% on Disappointing Q3 Results and Downgraded Guidance

NEW YORK - ATI Inc. (NYSE:ATI) reported third-quarter earnings that fell short of analyst expectations and lowered its year-end outlook, leading to a 5% decline in share prices during early trading on Tuesday. The specialty materials manufacturer reported adjusted earnings of $0.60 per share for the third quarter, below the $0.66 anticipated by analysts. Revenue came in at $1.05 billion, also falling short of the consensus estimate of $1.12 billion.

ATI further revised its earnings guidance for 2024 to a range of $2.24 to $2.30 per share, which is below the previous range of $2.40 to $2.60 and Wall Street's expectation of $2.45. The company attributed the uncertainty across its aerospace customer base to slower aircraft production rates and supply chain disruptions. These factors, along with unplanned outages and transportation issues related to Hurricane Idalia, caused delays in certain shipments throughout the quarter.

ATI President and CEO Kimberly A. Fields stated, "Our third-quarter results reflected year-over-year growth in sales and EBITDA, but this rate of growth fell short of our expectations. We remain confident in both long-term demand and our ability to deliver results for our customers and shareholders."

Despite the challenges, ATI reported that the aerospace and defense markets accounted for 62% of its third-quarter sales. The company's adjusted EBITDA margin reached 17.7% of sales, improving by 100 basis points sequentially.

For the quarter, ATI achieved revenue of $1.05 billion, reflecting a 2% increase year-over-year. Net income attributable to ATI was $82.7 million, or $0.57 per share, compared to $90.2 million, or $0.62 per share, for the same period last year.

The company closed the quarter with $406.6 million in cash and cash equivalents. ATI also announced a new $700 million share repurchase authorization in the third quarter.