RTI’s sales down in 4th quarter
By Don Shilling
A declining appetite for titanium led to a fourth-quarter and annual loss for RTI International Metals.
The Pittsburgh-based company, which has a titanium mill and offices in Weathersfield Township, said Thursday it lost $57.3 million in the fourth quarter and $67.2 million for all of 2009.
Annual sales dropped by one -third last year.
Results have been pulled down by an unprecedented buildup of titanium in the supply chain for commercial aircraft, the company said. The buildup follows a two-year delay in the launch of Boeing’s new 787 Dreamliner and a global recession that has reduced demand, RTI said.
The company’s titanium group, which includes the Weathersfield mill and one in Canton, has been operating at less than 50 percent capacity.
Dawne Hickton, RTI vice chairwoman, chief executive and president, said better days are ahead but she can’t say when. The market is too uncertain to provide any guidance on future earnings, she said.
Hickton added that a dramatic increase in production is drawing closer but isn’t expected this year.
She said RTI has “tremendous long-term prospects,” however, because of its contracts to supply four titanium-intensive planes: the military’s new joint-strike fighter, the Boeing 787 and two planes from Airbus, a European manufacturer.
Hickton noted that RTI has $120 million in cash on hand and virtually no debt.
In the near term, Airbus is struggling to meet the minimum demands of contracts that it has with RTI. The manufacturer owes RTI $17.9 million, which is due this year.
Also, Airbus has informed RTI that it will require less than half of the 5 million pounds that the contract requires in purchases for this year.
Hickton said the companies are discussing the shortfall. RTI is open to a solution that will provide long-term benefits, but it expects Airbus to honor its agreement if no alternative agreement is reached, she said.
In trading Thursday, RTI’s stock dropped $4.88, or 19 percent, to close at $21.36. It has traded between $8.99 and $29.25 in the past year.
The fourth-quarter loss of $57.3 million represented a loss of $1.91 per share. Sales last quarter were $97.3 million.
In the fourth quarter of 2008, RTI earned $3.6 million, or 16 cents a share, on sales of $148.8 million.