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Sep 30, 2023
ATI Q3 2023 Earnings Report
ATI reported Q3 2023 results driven by increasing Aerospace & Defense content, resulting in year-over-year earnings growth.
Key Takeaways
ATI Inc. reported third quarter 2023 sales of $1.03 billion and net income attributable to ATI of $75.7 million, or $0.52 per share. Aerospace and defense represented 61% of Q3 2023 sales, up from 51% in Q3 2022. Adjusted EPS was $0.55 and adjusted EBITDA was $148.1 million, or 14.4% of sales.
Aerospace and defense reached 61% of revenue, up 10 percentage points over last year.
Commercial airframe product sales in HPMC segment more than doubled compared to the prior year.
HPMC segment EBITDA was $115.7 million, or 21.5% of sales, driven by increased volumes on higher-margin next-generation commercial aerospace platforms.
Company repurchased $45 million of common stock at an average price of $43.93, retiring approximately 1.0 million shares.
ATI
ATI
ATI Revenue by Segment
Revenue by Segment
High Performance Materials & Components Revenue
CapyFin.com Forward Guidance
ATI expects sequential and year-over-year earnings growth in the fourth quarter, led by the HPMC segment. HPMC EBITDA margins are expected to continue to improve year-over-year. AA&S segment expects stable performance. Company expects to generate significant cash from operations due to improvements in managed working capital.
Positive Outlook
- Expect sequential and year-over-year ATI earnings growth in the fourth quarter, led by our HPMC segment.
- HPMC EBITDA margins in the fourth quarter are expected to continue to improve year-over-year, in line with our prior guidance.
- Backlogs remain strong across aerospace and defense.
- Continued process optimization will favorably impact future growth and performance.
- In the AA&S segment, the Company assumes stable performance in the fourth quarter 2023, due to sustained growth in the aerospace and defense related markets.
Challenges Ahead
- We continue to optimize operations and resolve bottlenecks that come with growing demand.
- Certain recessionary forces impacting AA&S segment.
- Cash used in operating activities includes voluntary pension contributions of $222 million in the third quarter.
- Reduced accounts receivable and inventory levels were partially offset by lower accounts payable in the third quarter.
- Managed working capital as a percent of sales was 39.9%.