Allegheny Technologies, Inc. (NYSE:ATI) dropped over 10 percent as the company announced yesterday that it is suspending its quarterly dividend. $35 million will be used to fund the company’s pension, improve near-term liquidity and reduce debt. ATI made a $115 million pension payment in July and has a $135 obligated pension for q1 2017.
“We expect ATI’s financial performance to improve significantly in 2017 as a result of strong profitable growth in our High Performance Materials & Components segment, a return to modest profitability in our Flat Rolled Products segment, and the aggressive cost reduction actions we have taken since late last year,” said president and CEO, Rich Harshman.
Analyst Chris Olin at Rosenblatt Securities claimed that ATI is set up well in the aerospace markets. “They produce the key materials and forged products for the new General Electric Engines to be used on the Boeing 787 MAX,” he said. “However, the production of these next generation aircraft has not ramped fast enough to offset the negative momentum in commodity markets.”