Second quarter sees small profit for RTI

RTI does not expect a turnaround in overall demand until at least the second half of 2010.

STAFF/WIRE REPORTS

PITTSBURGH — RTI International Metals’ Titanium Group, parent of RTI (RMI Titanium Co.) in Niles, made money over the second quarter ending June 30, but just barely.

RTI reported net earnings of $100,000, or 1 cent per share, on net sales of $104.4 million.

During the second quarter of 2008, RTI said it had net income of $18.6 million, or 81 cents per share on net sales of $159.8 million.

RTI said second-quarter earnings were adversely affected by continued weakness in commercial aerospace demand, sustained softness in the energy and industrial markets, and the impact from lower use and other operational inefficiencies in its fabrication group.

For the six-month period ending June 30, RTI said it lost $1.3 million, or 6 cents per share, compared with a profit of $40.9 million, $1.76 per share, for the same period in 2008. Sales dropped to $210.4 million from $310.5 million a year ago.

“Since April, market conditions have not improved in any of our sectors,” said Dawne S. Hickton, chief executive officer.

“However, we believe that we are at the bottom of the trough. But, we do not expect a turnaround in overall demand until at least the second half of 2010. Fortunately, our long-term customer agreements and ability to manage expenses allow us to operate profitably in our titanium and distribution segments,” she said in a prepared statement.

Despite continued global economic and market challenges, particularly in the commercial aerospace sector, RTI generated $16.7 million of operating cash flow during the second quarter. Capital expenditures during the quarter were $19.1 million, she said.

According to RTI’s financial report, for the second quarter of 2009 the titanium group had operating income of $2.1 million on sales of $62.4 million. During the same period in 2008, the titanium group earned operating income of $18.4 million on sales of $96.0 million.

During the first six months of 2009, the titanium group had operating income of $6.3 million on sales of $126.5 million. Year-to-date profitability has declined compared with last year, when the group had operating income of $46.8 million on sales of $198.2 million.

The titanium group, of which RTI in Niles is a part, has put on hold construction of a titanium sponge project in Hamilton, Miss., said Richard Leone, company spokesman. “We are exploring the availability of alternative sponge sources that would meet future needs,” he said.

The Niles plant has about 1,200 employees.

RTI International Metals, based in Pittsburgh, produces titanium mill products and supplies fabricated titanium and specialty metal components for the international market.