ATI Inc. Reports Mixed Q3 and YTD Results, with Aerospace & Defense Segment Driving Growth

ATI Inc. reported its financial results for the quarter and year-to-date period ending September 29, 2024, showing a mixed performance in revenue and profitability compared to the previous fiscal period. Total sales for the third quarter reached $1,051.2 million, a 2.5% increase from $1,025.6 million in the same quarter of 2023. Year-to-date sales also rose to $3,189.4 million, up from $3,109.7 million in the prior year.

The Aerospace & Defense segment was a significant contributor to this growth, with quarterly revenue increasing to $653.8 million from $625.8 million year-over-year. However, the Energy segment saw a decline, with revenue dropping to $142.5 million from $148.9 million in the same quarter of the previous year. Year-to-date, the Aerospace & Defense segment's revenue increased to $1,953.4 million, while the Energy segment's revenue fell to $443.8 million from $538.6 million.

Gross profit for the quarter improved to $224.8 million, representing 21.4% of sales, compared to $194.6 million (19.0% of sales) in Q3 2023. Year-to-date gross profit also increased to $649.6 million, up from $596.9 million. Operating income for the quarter was $142.2 million, compared to $125.2 million in the prior year, while year-to-date operating income rose to $400.0 million from $358.1 million.

Despite these gains, net income for the quarter decreased to $86.6 million from $94.1 million year-over-year, with net income attributable to ATI falling to $82.7 million from $90.2 million. Year-to-date net income also declined to $240.6 million from $274.2 million, reflecting a decrease in basic net income per share from $0.70 to $0.64 for the quarter.

Strategically, ATI has made significant moves, including the conversion of $291.0 million of its 3.5% Convertible Notes into 18.8 million shares of common stock, which impacted its equity structure. The company also repurchased $40 million worth of common stock in Q3 2024, totaling $190 million year-to-date under its $700 million Share Repurchase Program authorized in September 2024.

As of September 29, 2024, ATI's cash and cash equivalents stood at $406.6 million, down from $743.9 million at the end of 2023. Total assets increased to $5,065.8 million from $4,985.1 million, while total debt decreased to $1,898.2 million from $2,199.2 million. The company reported a backlog of confirmed orders totaling $3.9 billion, up from $3.6 billion in the previous year, indicating a positive outlook for future revenue generation.