Yahoo Finance Allegheny Inks Long-term Agreement With GE Aviation
Allegheny Technologies Incorporated ATI recently announced that it has landed an agreement with GE Aviation — a unit of General Electric GE — to supply iso-thermal and hot-die forgings. Notably, iso-thermal and hot-die forgings are used to make commercial jet engines.
These multi-year agreements are expected to start in January 2021. Allegheny expects sales over the lifetime of these agreements to total roughly $2.5 billion, averaging more than $300 million a year.
Per management, these agreements reflect GE Aviation’s reliance on Allegheny to supply its production lines with the highest quality materials and components on time.
Moreover, Allegheny’s unique process capabilities and expertise in deep materials science enables it to partner with its customers to develop and manufacture the components as well as materials that enable the more fuel-efficient jet engines of today.
Shares of Allegheny have declined 7.7% in the past year against the industry’s 11.4% growth.
The company expects backlogs for single-aisle platforms to remain strong in the High Performance Materials & Components (HPMC) unit. However, it expects uneven order patterns along with inventory management actions by customers to affect shipments in fourth-quarter 2019. This is expected to partly offset the benefits from Allegheny’s larger share of high-value commercial jet engine material and components.
In the Flat-Rolled Products (FRP) unit, the company expects consistent profitability for the fourth quarter on sustained strength in high-value products in the United States as well as the STAL joint venture. Also, favorable impacts of higher nickel prices on raw material surcharge values are expected to drive the segment.
Allegheny Technologies Incorporated Price and Consensus
Zacks Rank & Stocks to Consider
Allegheny currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the basic materials space are General Moly, Inc GMO and Agnico Eagle Mines Limited AEM, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
General Moly has an expected earnings growth rate of 12.5% for the current fiscal year. The company’s shares have gained 55% in the past year.
Agnico Eagle has an estimated earnings growth rate of 167.9% for the current year. Its shares have surged 54.5% in the past year.
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Click to get this free report General Electric Company (GE) : Free Stock Analysis Report Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report General Moly, Inc (GMO) : Free Stock Analysis Report Allegheny Technologies Incorporated (ATI) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research
