Fourth Quarter Impairment Charges Cost Allegheny Technologies US$267M
01/20/2016 - Specialty steelmaker Allegheny Technologies Inc. said its fourth-quarter earnings will take a US$267 million hit from inventory charges, write-offs, and costs associated with layoffs and mill idlings.
In a statement, the company said the charges include a US$127 million write-off of all of the goodwill in its flat-rolled products business.
In December, the company announced that it would idle the standard stainless meltshop and sheet finishing operations at its Midland, Pa., USA, facility and its grain-oriented electrical steel operation. The Midland facility is due to be fully closed this month, and the shutdown of the grain-oriented electrical steel operation is to be completed in April.
“The future restart of the Midland and GOES operations, respectively, will depend on future business conditions and ATI’s ability to earn an acceptable return on invested capital on products produced at these operations,” ATI said.
The company said it is incurring US$4 million in idling costs. It also said it is incurring US$6 million in severance charges for layoffs of salaried employees in its high-performance materials and components segments and at its headquarters.
The company is to report its year-end earnings on 26 January.
In December, the company announced that it would idle the standard stainless meltshop and sheet finishing operations at its Midland, Pa., USA, facility and its grain-oriented electrical steel operation. The Midland facility is due to be fully closed this month, and the shutdown of the grain-oriented electrical steel operation is to be completed in April.
“The future restart of the Midland and GOES operations, respectively, will depend on future business conditions and ATI’s ability to earn an acceptable return on invested capital on products produced at these operations,” ATI said.
The company said it is incurring US$4 million in idling costs. It also said it is incurring US$6 million in severance charges for layoffs of salaried employees in its high-performance materials and components segments and at its headquarters.
The company is to report its year-end earnings on 26 January.
