The Allegheny Technologies Incorporated (NYSE:ATI) stock received rough treatment at the hands of investors after it announced disappointing numbers for the third quarter and said it was closing two plants.
The stock fell 15.06% to close Tuesday at $15.12 with 8.85 million shares traded.
Technically the stock has fallen out of a rectangle consolidation pattern in effect from August, and is positioned just above its 200-day moving average of $14.70. If the 200-day line is broken in the coming sessions, ATI may extend its decline.
Allegheny Technologies Incorporated (NYSE:ATI) third quarter
For the third quarter, Allegheny reported adjusted EPS of $-0.21 which missed estimates by a huge $0.11 and revenue of $770.5 million which missed by $45.27 million and was down 7.5% year on year.
In August ATI idled its titanium sponge plant in Rowley, Utah, as it found it could purchase titanium sponge on the market at prices lower than the cost to make the material at Utah, and because they could no longer be operated at an acceptable rate of return.
Yesterday, the company said it will permanently close down two plants, in Midland, PA, and Bagdad, PA respectively, due to adverse market conditions including a global overcapacity in stainless sheet and strips.
Allegheny Technologies Incorporated (NYSE:ATI) takes tough actions
“We are focused on returning ATI to sustainable profitable growth and building a business that has a strong balance sheet and is capable of generating strong cash flow,” said Rich Harshman, Chairman, President and Chief Executive Officer. “This requires making decisions and taking actions that place a priority on innovation, and maximize the growth of our differentiated products that create value for our customers and shareholders over the long term. It requires our businesses to be lean and efficient, while creating great opportunities for our people. The restructuring and rightsizing actions that we have been implementing over the last year, while difficult, are integral to returning ATI to sustainable profitability.”
The two Pennsylvania plants together employed about 610 workers.