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RTI records $11.4M profit
By GRACE WYLER
RTI International Metals exceeded expectations with first-quarter profits, but the company said it will continue to face challenges in 2010.
The titanium-products manufacturer recorded a net income of $11.4 million in the first quarter of 2010, compared with a $1.5 million loss for the same period last year, the company reported Tuesday.
Sales rose to $107.9 million, up slightly from $106.05 million in the first quarter of 2009.
RTI revenue gained $15.4 million from the company’s contract settlement with Airbus.
Because of excess inventory, Airbus required less than the minimum volumes required by its RTI supply contract in 2009 and paid the difference, said Richard Leone, RTI director of investor relations and marketing.
RTI was based in Niles until 2008 when the company moved its headquarters to Pittsburgh. The company still has titanium operations in Niles.
The titanium group was the company’s most successful division in the first quarter of 2009, with a net income of $15 million, compared with $4.2 million in the first quarter of 2010.
Mill-product shipments and prices declined, however, down to 2.2 million pounds at an average price of $19.35 per pound. The group shipped 2.7 million pounds in the first quarter of 2009 at an average price of $22.22.
The price decline was driven by lower prices in the company’s long-term sales contracts, the company said in a release.
RTI has long-term supply contracts with major aerospace companies including Lockheed Martin Corp., Airbus and Boeing Co.
RTI continues to suffer from the tumult in the aerospace industry.
First-quarter demand was lowered by production reschedules in the commercial and defense aerospace markets, the company said.
“Until we see a sustainable increase in production for commercial aircraft and the Joint Strike Fighter, our overall operating environment will be difficult and challenge RTI’s ability to be meaningfully profitable,” president and chief executive Dawne Hickton said in a statement.
The company does not expect to be profitable in 2010, Hickton said in a conference call with reporters and analysts Tuesday.
“Although we are starting to see the signs of recovery for next year, 2010 will be a challenge from both an operating and earnings perspective,” Hickton said. “Monitoring our expenses and managing our cash, which includes the $15.4 million paid by Airbus in early April, will continue to be a priority.”
Hickton said the company expects 2011 will be similarly challenging until RTI can increase production to fulfill its contracts with Airbus and Lockheed Martin.