ATI Inc. ((ATI)) has held its Q2 earnings call. Read on for the main highlights of the call.
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ATI Inc. Reports Robust Earnings Amidst Market Challenges
ATI Inc.’s recent earnings call painted a picture of robust financial health, marked by impressive growth in the commercial jet engine segment and strategic long-term agreements with aerospace giants. Despite these successes, the company faces hurdles in the industrial and medical markets due to prevailing economic conditions.
Strong Financial Performance
ATI Inc. showcased a strong financial performance with a 4% year-over-year revenue growth, reaching $1.14 billion. The company’s adjusted EBITDA rose by 14% to $208 million, and adjusted earnings per share exceeded expectations at $0.74.
High Performance Materials & Components (HPMC) Segment Success
The HPMC segment delivered remarkable results with margins of 23.7%, improving by 350 basis points from the previous quarter. Expectations are high for the segment to maintain margins exceeding 24% in the latter half of the year.
Commercial Jet Engine Sales Growth
ATI’s commercial jet engine sales surged by 27% in the second quarter and are up 31% year-over-year. The company anticipates full-year growth in this segment to surpass 20%, underscoring its strong position in the aerospace market.
Successful Long-term Agreements with Airbus and Boeing
The company secured a new long-term guaranteed volume agreement with Boeing and expanded its agreement with Airbus, solidifying its role as a key supplier in the aerospace industry.
Strong Free Cash Flow and Shareholder Returns
ATI reported an adjusted free cash flow of $93 million, a significant 94% increase year-over-year. The company also executed $250 million in share repurchases, reflecting its commitment to delivering value to shareholders.
Challenges in Industrial Markets
The industrial markets faced stagnation due to tariff impacts and weak macroeconomic conditions. Sectors such as construction, mining, and food equipment experienced double-digit declines in demand.
Medical Market Softness
The medical market remained challenging, with revenue flat sequentially and down year-over-year, attributed to elevated inventories and competitive pricing pressures.
Forward-looking Guidance
ATI raised its full-year guidance midpoint for adjusted EBITDA, EPS, and adjusted free cash flow, driven by strong performance and increased demand for commercial jet engines. The company expects continued growth in the defense segment and promising developments in specialty energy markets, with a positive outlook for the remainder of 2025 and beyond.
In conclusion, ATI Inc.’s earnings call highlighted a strong financial performance and strategic advancements in the aerospace sector, despite facing challenges in other markets. The company’s forward-looking guidance suggests continued growth and innovation, positioning it well for future success.