Excluding its tungsten-materials business, which is being sold, Allegheny will post a loss of 27 cents to 30 cents a share for the period, the Pittsburgh-based company said today in a statement. Sales, excluding tungsten, were about $970 million, it said.
Jet-engine manufacturers continued to reduce inventories in the quarter, hurting demand for metal components, Chairman and Chief Executive Officer Rich Harshman said in the statement. Global economic uncertainties affected demand for the company’s flat-rolled products while margins on stainless-steel products were squeezed by higher raw-material costs, he said.
Allegheny also said that after completing a strategic review, it closed its fabricated-products business and decided to sell its iron-casting unit. As a result, it will take a $9 million pretax charge in the third quarter, largely comprising a writedown on asset, the company said.
Kennametal Inc. (KMT:US) agreed in September to buy Allegheny’s tungsten-materials unit, which makes counterweights and industrial alloys, for $605 million. Allegheny said today it expects the deal to close in the fourth quarter.
Allegheny dropped 1.8 percent to $30.37 at 10:07 a.m. in New York. The company is scheduled to report third-quarter earnings on Oct. 23.
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