ATI

ATI Inc. has reported past second-quarter 2026 results showing sales of US$1,261.1 million and net income of US$151 million, alongside continued execution of its share repurchase program totaling US$705.12 million since 2024. The combination of higher year-on-year earnings per share and ongoing buybacks suggests ATI is simultaneously improving profitability and reducing its share count, which can enhance per-share financial metrics. We’ll now examine how ATI’s stronger quarterly earnings and ongoing share repurchases may influence the company’s existing investment narrative. We've uncovered the 12 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. To own ATI, you have to believe in its role as a key supplier of high value alloys to aerospace and other advanced industries, while accepting its reliance on a concentrated group of large OEM customers and ongoing heavy capital needs. The latest quarter’s higher earnings and continued buybacks do not materially change that near term story, but they do put more focus on whether non aerospace end markets can keep up and support margins. The completion of ATI’s US$705.12 million buyback since 2024 is the announcement that most directly connects to this earnings release, as higher earnings per share now reflect both stronger profitability and a smaller share base. For investors watching catalysts, that combination sharpens attention on how much future earnings growth will need to come from underlying demand and pricing, rather than simply from financial engineering. Yet behind ATI’s improved per share metrics, there is still an underappreciated risk investors should be aware of around its dependence on a handful of major aerospace customers and... Read the full narrative on ATI (it's free!) ATI's narrative projects $5.9 billion revenue and $874.1 million earnings by 2029. Uncover how ATI's forecasts yield a $200.33 fair value, a 7% downside to its current price. Some of the most optimistic analysts were already banking on ATI reaching about US$6.2 billion in revenue and nearly US$1.0 billion in earnings by 2029, which is far more upbeat than the baseline view and leans heavily on ongoing capacity expansion and sole source contracts even as recent results and customer concentration risks suggest those expectations could be reassessed after this latest quarter. Explore 5 other fair value estimates on ATI - why the stock might be worth 24% less than the current price! Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. A great starting point for your ATI research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision. Our free ATI research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate ATI's overall financial health at a glance. Markets shift fast. These stocks won't stay hidden for long. Get the list while it matters: Invest in the nuclear renaissance through our list of 92 elite nuclear energy infrastructure plays powering the global AI revolution. The future of work is here. Discover the 37 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. Capitalize on the AI infrastructure supercycle with our selection of the 55 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include ATI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Mercury Systems MRCY reported adjusted earnings of 37 cents per share for the fourth quarter of fiscal 2026, in line with the Zacks Consensus Estimate. Adjusted earnings declined 21.3% year over year from 47 cents. Revenues of $289.78 million increased 6.1% year over year and beat the Zacks Consensus Estimate by 9.37%.The revenue performance was supported by record bookings and continued production ramp-up. Total bookings reached $660 million, up 93.1% year over year, while the book-to-bill ratio stood at 2.28. The strong order activity pushed backlog above $1.9 billion. The fourth-quarter booking performance was broad-based across common processing architecture, effectors, airborne applications, space and missile defense. MRCY also posted its largest quarter ever for common processing architecture bookings, reflecting stronger activity as programs move toward production.The company also secured a significant multiyear booking related to memory requirements for advanced defense platforms. Management said the customer is seeking to secure supply early, reflecting demand tied to future production needs. Mercury Systems Inc price-consensus-eps-surprise-chart | Mercury Systems Inc Quote Revenue growth was driven by higher activity across the portfolio and increased production volumes. Overtime revenues rose 23.6% year over year, reaching its highest level in 15 quarters, with management linking the increase largely to improved material availability.Domestic revenues, which represented approximately 85.8% of fiscal 2026 revenues, grew 13% organically year over year. Mercury Systems is also expanding capacity, automation and factory operations to support programs transitioning to higher-volume production. Gross margin was 30.6%, down from 31% in the prior-year quarter. Management attributed the pressure primarily to program mix and approximately $4 million of higher net estimated-at-completion change impacts.Operating expenses increased approximately $13 million year over year. Selling, general and administrative expenses rose about $10 million, while research and development costs increased roughly $4 million, with compensation-related costs, including stock-based compensation, driving much of the increase.Adjusted EBITDA was $48.52 million, down from $51.27 million a year earlier, while adjusted EBITDA margin contracted to 16.7% from 18.8%. The company expects margins to improve as lower-margin legacy backlog is converted and newer bookings carry margins closer to its target profile. MRCY is pursuing factory optimization initiatives to improve scalability and execution as production volumes rise. These efforts include capacity expansion, increased automation and consolidation of subscale sites.Mercury Systems also entered a strategic agreement with Palantir to use artificial intelligence software for material planning and factory operations. Management expects the effort to help improve backlog conversion and delivery performance, although the fiscal 2027 outlook excludes any benefit from the partnership. Cash flows from operating activities increased 10.7% year over year to $42.15 million, while free cash flow declined 15.9% to $28.57 million. MRCY ended the fourth quarter with $214.31 million in cash and cash equivalents, down from $331.8 million in the third quarter. Long-term debt declined to $441.5 million from $591.5 million after the company made a $150 million payment against its revolving credit facility. For fiscal 2027, MRCY expects revenues to approach $1.1 billion, with growth approaching double digits year over year. Adjusted EBITDA is expected to approach $200 million, with the margin in the high teens. Fiscal first-quarter revenues are expected to grow at a high-single-digit rate year over year. MRCY currently carries a Zacks Rank #3 (Hold).ATI Inc ATI, AAR AIR and Astronics ATRO are some better-ranked stocks that investors can consider in the broader Zacks Aerospace sector. ATI Inc, AAR and Astronics sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Shares of ATI Inc have surged 97.3% in the year-to-date period. The Zacks Consensus Estimate for ATI Inc’s 2026 EPS is pegged at $4.81 and indicating an improvement of 48.46% year over year.Shares of AAR have surged 80% in the year-to-date period. The Zacks Consensus Estimate for AAR 2026 EPS is pegged at $5.92 and indicating an improvement of 17.23% year over year. Shares of Astronic have surged 90.5% in the year-to-date period.The Zacks Consensus Estimate for Astronics 2026 EPS is pegged at $2.55 and indicating an improvement of 52.69% year over year. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Mercury Systems Inc (MRCY) : Free Stock Analysis Report ATI Inc. (ATI) : Free Stock Analysis Report AAR Corp. (AIR) : Free Stock Analysis Report Astronics Corporation (ATRO) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

ATI’s second quarter results were well received by the market, following strong year-on-year growth driven by the company’s ongoing portfolio transformation and higher-value product mix. Management attributed the quarter’s performance to operational improvements, a record backlog, and robust demand in aerospace and defense segments. CEO Kimberly Fields highlighted the transformation of the AA&S segment, stating, “What was once viewed as a more cyclical, lower-margin business has become a second durable earnings engine for ATI.” The company also noted improved commercial terms and execution as key contributors to margin expansion. Is now the time to buy ATI? Find out in our full research report (it’s free). Revenue: $1.26 billion vs analyst estimates of $1.22 billion (10.6% year-on-year growth, 3.4% beat) Adjusted EPS: $1.23 vs analyst estimates of $1.04 (18.3% beat) Adjusted EBITDA: $284.4 million vs analyst estimates of $253.6 million (22.6% margin, 12.1% beat) Operating Margin: 17.4%, up from 14.1% in the same quarter last year Market Capitalization: $31.38 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Richard Safran (Seaport Research Partners) asked about the gap between increased EBITDA and free cash flow guidance. CFO Rob Foster explained that year-end shipment timing and planned inventory build for early 2027 limited cash conversion, but emphasized an ongoing goal of over 90% free cash flow conversion. Richard Safran (Seaport Research Partners) followed up on AA&S margin potential. CEO Kimberly Fields stated the segment’s structural changes and increased focus on aerospace and defense applications should support mid-20% EBITDA margins in the future, driven by improved pricing and mix. Seth Seifman (JPMorgan) questioned the growth outlook and margin expansion in HPMC for the second half. Fields responded that contract renewals and productivity improvements are expected to drive sequential margin improvements, with deferred shipments set to contribute as new facilities ramp. David Strauss (Wells Fargo) asked if the implied Q4 EBITDA was sustainable as a run-rate into next year. Foster indicated the incremental margin profile should remain in the 40–50% range, supported by structural business changes, but declined to give explicit 2027 guidance. Myles Walton (Wolfe Research) inquired about the outlook for airframe revenue acceleration in the second half. Fields described inventory normalization and fully committed order books as providing confidence in mid- to high single-digit full-year airframe growth. Looking ahead, the StockStory team will be monitoring (1) execution of capacity expansions and throughput improvements from recent capital projects, (2) sustained backlog growth and conversion of long-term contracts into revenue, and (3) continued margin expansion in AA&S and HPMC as product mix shifts toward higher-value aerospace and defense programs. The successful ramp-up of new facilities and ongoing productivity initiatives will be key markers of ATI’s progress. ATI currently trades at $230.50, up from $205.11 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 8:30 a.m. ET Board Chair, President and Chief Executive Officer - Kimberly Fields Senior Vice President and Chief Financial Officer - James Foster Vice President of Investor Relations - Rob Rengel Operator: Thank you for joining us, and welcome to the ATI Second Quarter 2026 Results Conference Call. [Operator Instructions] I will now hand the conference over to Rob Rengel, Vice President of Investor Relations. Please go ahead. Rob Rengel: Good morning, and welcome to ATI's Second Quarter 2026 Earnings Call. I'm excited to step into this role, and I want to begin by recognizing Dave Weston and the significant contributions he made to ATI before his retirement. Today's discussion is being webcast at atimaterials.com. Joining me are Kim Fields, Board Chair, President and CEO; and Rob Foster, Senior Vice President and CFO. Before starting our prepared remarks, I would like to draw your attention to the supplemental presentation that accompanies this call. Those slides provide additional color and details on our results, capabilities and outlook and can also be found on our website. As a reminder, all forward-looking statements are subject to various assumptions and caveats. These are noted in the earnings release and in the accompanying presentation. After our prepared remarks, we'll open the line for questions. Now I'll turn the call over to Kim. Kimberly Fields: Thanks, Rob, and welcome to the team, and good morning, everyone. Thank you for joining us. Turning to Slide 3. ATI delivered another strong quarter, demonstrating the increasing earnings power of our business. Second quarter adjusted EBITDA was $284 million, $29 million above the high end of our prior guidance. Excluding a $10 million asset sale gain, underlying performance still exceeded the high end of our guidance by $19 million. Adjusted EBITDA increased 37% year-over-year, making this ATI's strongest quarterly EBITDA performance since 2007. Second quarter adjusted EBITDA margins expanded 440 basis points year-over-year to 22.6%, reflecting stronger commercial terms, favorable mix, disciplined execution and operational improvements through Elevation. Revenue this quarter increased 11% year-over-year to $1.3 billion, an annualized run rate of more than $5 billion. That expanding revenue was supported by another record backlog of $4.4 billion, up 18% from a year ago and 7% sequentially. Importantly, that backlog increasingly reflects long-term agreements, sole-source positions and strategic programs that provide meaningful multiyear visibility into future shipments and earnings. Adjusted free cash flow in the quarter was $69 million, bringing first half free cash flow to $143 million, an improvement of $193 million versus the first half of last year. Cash generation will accelerate meaningfully in the second half, putting us on track to generate positive free cash flow in every quarter of 2026. Our second quarter performance was led by our AA&S segment, and it's one of the most important stories from the quarter. Over the last several years, we've transformed AA&S. What was once viewed as a more cyclical, lower-margin business has become a second durable earnings engine for ATI. We've improved the portfolio, strengthened our commercial discipline and focused our investments where ATI's differentiated capabilities create the greatest value. The result is a fundamentally different business. Excluding the asset sale gain, AA&S generated an underlying EBITDA margin of approximately 22% compared with 14% a year ago. That's not simply the result of stronger markets. It's the result of better mix, better pricing and better execution. We built the transformation on 3 key priorities. First, we've optimized the portfolio, shifting AA&S toward higher-value aerospace, defense and specialty energy applications, while at the same time, exiting lower-value products. Today, aerospace and defense accounts for approximately 44% of AA&S revenue, more than double their share 5 years ago. Second, we've leveraged ATI's unique technical capabilities in high-purity hafnium and zirconium. ATI is 1 of 3 qualified producers in the Western world capable of manufacturing these materials to the purity standards required for aerospace and nuclear energy applications. With China limiting exports to these markets, our capabilities have become even more valuable. And third, we've translated that scarcity into stronger commercial performance. Improved pricing for high-purity hafnium and zirconium benefits our defense and specialty energy businesses and also flows through to our jet engine alloy materials, where hafnium and zirconium are critical alloy additions. Combined with better product mix and disciplined commercial execution, that has materially increased the earnings power of AA&S. Now let me be equally clear about HPMC. Nothing about this quarter changes our long-term strategy. HPMC remains ATI's largest long-term growth platform and the foundation of our aerospace strategy. For HPMC, performance in the quarter was within our expectations, although qualification timing at both our new facility in Mexico and our new titanium electron-beam furnace or EB2, shifted some shipments into future periods. The important point is that our confidence in HPMC's growth trajectory remains intact. Commercial terms and operational productivity are improving, and we're systemically increasing the productive output of the manufacturing system through Elevation and targeted investments. Those improvements support sequentially stronger performance through the second half and position HPMC for additional growth into 2027. Taken together, these results show a stronger, more balanced ATI. We are not benefiting from just one favorable market or one strong quarter. We now have 2 businesses capable of generating durable earnings growth supported by differentiated products, stronger commercial performance, operational excellence and a record backlog that provides meaningful multiyear visibility into the future. Turning to Slide 4. Based on our first half performance and improved visibility into the balance of the year, today, we are meaningfully raising our full year outlook across every key financial metric. As a result, our updated outlook now includes an adjusted EBITDA midpoint of $1.160 billion, representing 35% year-over-year growth, and adjusted EPS midpoint of $5.04, an increase of 56% year-over-year and an adjusted free cash flow midpoint of $575 million, an increase of 51% year-over-year. Importantly, these increases reflect a sustainable step change in AA&S performance and our ongoing confidence in the HPMC ramp. Turning to Slide 5. ATI's operating model is helping convert strong demand, improved commercial terms and targeted investments into higher earnings, margins and cash flow. Elevation is the foundation of that operating system. Let me give you some insight into how we operate. First, we increase the productivity of the assets we own. Second, we make targeted investments where ATI has differentiated technology, committed customer demand and the highest returns. And third, we embed our operating system to make those improvements repeatable across the enterprise. That combination is increasing ATI's earning power, strengthening cash generation and creating long-term shareholder value. Most importantly, we're seeing measurable results through Elevation. We've increased year-over-year throughput by 30% in ultrasonic inspection, 15% in isothermal forgings and 15% in primary nickel melt. Those aren't isolated improvements. When combined with our targeted capacity investments, we'll realize higher productive output from our manufacturing network. Every major investment we're making supports existing customer demand and expands ATI's differentiated capabilities. Moving to Slide 6. Let me remind you about our capacity investments. Our new Chihuahua, Mexico facility supports next-generation aerospace engine testing and inspection, and our EB2 furnace expands premium quality titanium capability and capacity. Our nickel re-melt expansion remains on schedule with our new VIM furnace coming online by the end of 2027. Together, these investments are targeted to increase nickel capacity by approximately 15% to 20% by early 2028 compared with year-end 2025. Across these combined nickel investments, we will deliver approximately $350 million of incremental annual revenue by 2028. The important point is that these investments, combined with Elevation, progressively increase the productive output of the manufacturing system. Turning to Slide 7. Across all of our end markets, we're seeing the same underlying dynamics. Customers have increasing need for qualified capacity, differentiated technology and certainty of supply. Those are areas where ATI has built durable competitive advantages through proprietary materials, unique manufacturing capabilities and decades-long customer qualifications. That competitive position supports stronger commercial terms, long-term agreements and attractive growth opportunities across our portfolio. Jet engines remains ATI's largest and most important growth market. Revenue increased 13% year-over-year and 8% sequentially, reflecting ongoing strength across both OEM production and aftermarket. The industry is transitioning toward next-generation engine platforms, and ATI is exceptionally well positioned to benefit. Our content on these engines is more than double that of legacy platforms, reflecting our differentiated materials in the hottest, most demanding section of the engine. Industry forecasts project next-generation engines will grow from about 35% today to over 50% of the installed fleet by 2030. Currently, we support every major next-generation commercial engine platform and produce 6 of the 7 most advanced nickel-based super alloys, including 5 where we are the sole source supplier. That differentiation translates into stronger pricing, richer product mix and long-term growth opportunities. Market conditions are developing largely as we anticipated. We continue to see high teens jet engine revenue growth for the full year. In airframe, supply chain inventories have largely normalized and customer order patterns are now aligning with announced OEM build rates. Our planned production for the balance of the year is supported by firm customer orders. Landing gear alloys remain our strongest airframe product category, while plate demand is improving. As a result, we continue to see mid- to high single-digit full year airframe revenue growth weighted towards the second half. Defense delivered another outstanding quarter as one of our fastest-growing markets. Revenue increased 36% year-over-year, reaching an all-time high as demand accelerated across naval nuclear, missile and missile defense applications. Our recently announced naval nuclear renewal extends through 2030 with improved pricing and product mix. It more than doubles annual revenue compared to the prior contract. We're also seeing strength build across titanium, nickel and niobium products, supporting strategic missile platforms, including Tomahawk, THAAD and PAC-3. We've already begun receiving orders in support of the Tomahawk program. As a result, we've increased our expectation for full year defense growth to the high teens, reflecting growing momentum across the portfolio. Specialty Energy declined in the quarter as we prioritize production toward defense orders with more immediate delivery requirements. That mix will rebalance in the second half, supported by nuclear shipments and durable industrial gas turbine demand. We continue to see mid-teens Specialty Energy revenue growth for the full year. In closing, we're building the ATI of the next decade, a stronger company with durable demand, better execution, expanding margins and greater cash generation. With that, I'll turn the call over to Rob. James Foster: Thanks, Kim. I'll start with the second quarter performance, explain the different profiles of HPMC and AA&S and close with the supporting details for our updated guidance. As shown on Slide 8, we delivered strong overall results. Adjusted EBITDA and EPS exceeded the high end of our guidance, while we expanded our consolidated margins and generated strong cash flow. These results demonstrate the strength of ATI's differentiated portfolio and the earnings power of our business model. Second quarter revenue was $1.3 billion, up 11% year-over-year, driven by 13% growth in aerospace and defense. Within that market segment, jet engine sales increased by 13%, reflecting increasing strength in high-temperature nickel alloys and favorable pricing. Airframe revenue declined slightly, consistent with our expectations with growth accelerating in the second half of the year. Defense-related revenue grew by 36% compared with the prior year, driven by robust demand and meaningful price gains supported by new long-term contracts. Specialty Energy revenue declined 6%, reflecting our decision to prioritize available production capacity toward higher-value naval nuclear demand during the quarter. Second quarter adjusted EBITDA was $284 million, up 37% year-over-year. This was $34 million above the midpoint and $29 million or 11% above the high end of our guidance. Excluding a $10 million asset sale gain in AA&S, underlying operating performance still exceeded the high end of our guidance by nearly $20 million, reflecting stronger pricing and mix. Second quarter consolidated adjusted EBITDA margin was 22.6%, up 440 basis points year-over-year. First half free cash flow improved significantly to $143 million compared with a use of $50 million in the first half of 2025. Managed working capital as a percentage of sales at the end of Q2 was 34%. We see further opportunities to improve inventory performance. For example, we are implementing a customer consignment strategy for forging input material to improve working capital efficiency. Capital expenditures were $69 million, including $23 million funded directly by customers. All key growth projects remain on schedule and on budget. Now on Slide 9, I'll review segment performance. HPMC sales increased 5% year-over-year to $637 million, primarily driven by growth in nickel products for jet engines. Segment margins expanded 40 basis points from the same period last year to 24.1%. Demand remains strong, while the timing of customer qualifications related to our new facility in Mexico and the EB2 titanium furnace shifted certain deliveries into future periods. These are timing effects and were partially offset in Q2 by higher volume and pricing on rotating jet engine nickel alloys. We see the deferred demand converting in the second half. In AA&S, sales increased 17% year-over-year to $624 million. Growth reflected multiple drivers, including pricing, mix and defense performance. Segment margin expanded 930 basis points to an all-time high of 23.7%, reflecting stronger pricing, execution and a more favorable mix. As Kim mentioned, AA&S is a fundamentally different business today. Through portfolio optimization, including 80/20, we have shifted this segment toward higher-value applications. We've been building an integrated interconnected business as our unique alloys are used across both HPMC and AA&S. Looking ahead, we see AA&S EBITDA margins consistently above 20%. This improvement in AA&S means both segments will now contribute to durable profitable growth. We are raising our full year outlook across every key financial measure. Our confidence is supported by contracted pricing, committed customer schedules, a higher structural earnings base in our AA&S segment and HPMC shipments that moved from Q2 to the second half. In AA&S, our renewed nuclear agreements, accelerated defense deliveries and shipments and improved hafnium and zirconium pricing provides support for sustained performance through the balance of the year. In HPMC, completed contract renewals are providing improved pricing and mix for jet engine materials. While customer qualification timing affected the second quarter, the associated demand remains a strong element in our second half production plan. Momentum will build in the third quarter carrying into the fourth quarter and next year. Our improved outlook reflects not only supportive end markets, but a stronger and more balanced ATI. As shown on Slide #10, in the third quarter of 2026, we anticipate adjusted EBITDA of $305 million to $315 million, translating to adjusted EPS of $1.31 to $1.37. At the midpoint, adjusted EBITDA would increase 38% compared with the third quarter of 2025 and 9% sequentially. We anticipate sequential profit improvement driven by AA&S pricing and mix strength, particularly in aerospace and defense. HPMC performance will strengthen as deliveries build through the second half with momentum starting in the third quarter and building into the fourth quarter. We see consolidated adjusted EBITDA margins expanding in the third quarter compared to the second quarter of 2026. Turning to Slide 11. Our higher full year outlook reflects the second quarter outperformance in AA&S and a better second half baseline. The increase versus our prior outlook is primarily supported by stronger AA&S pricing, mix and defense performance. Our full year HPMC outlook continues to reflect sequential improvement in performance as we previously anticipated. Specifically, we have committed contracts in place. This is not speculative. In addition, we will capture the second quarter timing effects during the second half. We are raising our full year adjusted EBITDA guidance to the range of $1.135 billion to $1.185 billion. The midpoint of the range represents 35% increase over prior year. This outlook translates to full year adjusted EPS range of $4.90 to $5.18. We see margin expansion in 2026 with full year consolidated adjusted EBITDA margins now projected in the low 20% range. We now expect full year consolidated incremental margins in the range of 50%. This is an improvement over the 40% we previously communicated, driven by additional strength in our AA&S segment. We anticipate second half performance to build sequentially. In the third quarter, the primary drivers are continued pricing and mix strength in aerospace and defense for both segments. We see the fourth quarter as our strongest quarter of 2026 for sales and profit. Our midpoint guidance implies approximately $335 million of EBITDA in Q4. That translates to roughly $1.350 billion annualized exit rate. While we are not providing 2027 guidance today, the commercial and operational drivers supporting that performance extend into next year. At a segment level, we see full year EBITDA margin for HPMC in the mid-20% range, consistent with our outlook from previous quarters. AA&S full year EBITDA margin will be in the low 20% range, an improvement over the upper teens level we communicated last quarter. The uplift is supported by stronger pricing and mix shifting towards aerospace and defense, as we've discussed. Note that the performance of our segments is increasingly driven by similar market dynamics. Turning to adjusted free cash flow. We are raising the midpoint of our range by $80 million, setting the range between $550 million and $600 million. The $575 million midpoint is $195 million higher than the 2025 free cash flow, a 51% increase year-over-year. This implies adjusted free cash flow generation of $430 million in the second half, driven by higher earnings, inventory conversion associated with scheduled shipments and customer-funded capital. Our capital deployment strategy is unchanged. Our gross CapEx range remains consistent with prior guidance at $280 million to $300 million. This includes the greenfield expansion facility in Mexico, which Kim mentioned. Customer-funded CapEx of $55 million to $65 million will be a partial offset. Share repurchases remains a priority for deploying incremental free cash flow. We view them as the most efficient way to return capital to shareholders. As of today, after our $50 million repurchase in Q2, we have $495 million remaining under our current repurchase authorization. Overall, we delivered a strong first half and expect even better second half. Our increased outlook is supported by contracted pricing, a record backlog, committed customer schedules and planned shipment timing. Kim, back to you. Kimberly Fields: Thanks, Rob. As we look ahead, our priorities remain clear: continue improving execution through Elevation, bring differentiated capacity online and allocate capital where returns are highest. We are confident in our ability to convert strong demand into sustained growth, higher earnings and cash flow. Now let's open the line for questions. Operator: [Operator Instructions] Your first question comes from the line of Richard Safran from Seaport Research Partners. Richard Safran: I have one question and one quick follow-up. On the guidance raise, if I did the math right, you did -- at the midpoint, you took EBITDA up by $125 million, but you took up your free cash flow guide by $80 million. So I just wanted to know if you could go over what drove that and how we should be thinking about cash and cash conversion going forward? Kimberly Fields: Thanks, Rich. It's -- I appreciate the question. So yes, I'll start -- I'll share a little bit on the guide, and then I'll hand it over to Rob. He can talk a little bit about the free cash flow and the outlook. I'll say our guide and our raise is really based on the strong performance we've had this quarter, and it's based on things that are already in place. So this is the contracted pricing improvements that we're seeing flow through, recently committed long-term agreements and customer orders that are already committed. And so we have high confidence that this is based on all those things I just mentioned, committed orders and a stronger business and the structural improvement that I shared in the prepared remarks around AA&S. You add in there some of the timing changes for HPMC, and that's what drives our confidence as far as our outlook. And to your point around cash flow, typically, we start the first half off -- we started from $143 million this year. It typically accelerates as we go through the year, and we anticipate that continuing as we go forward. But Rob, do you want to add any more color on that? James Foster: Yes, Rich, when I think about the cash flow, if you think about the increase in the EBITDA really, we're talking about higher shipments in the second half. And essentially, the reason why that's not all going to convert is really 2 things. One, it's the timing of conversion through accounts receivable. So we'll expect some of that higher volume with those late Q4 shipments to be in receivables. And the second piece is we do plan on a little bit more inventory as we prepare for the early part of 2027. So I think it's important to call out that when you look at our full year cash flow and the guide of the midpoint of $575 million, that represents an increase of over 51% from the full year 2025. And when I think about the free cash flow conversion, that assumes a high 80%, and as we've stated several times, our goal is to drive well over 90% free cash flow conversion. So I think we're trending in the right direction. And as I think about going forward into 2027, I'm not going to give updated guidance here today on 2027, but the free cash flow conversion at 90% or greater is where we're thinking about the target. Richard Safran: Okay. And then just a quick follow-up on AA&S and at the risk of pressing you on something. So given your remarks about transforming the business, your comments about 20% EBITDA margins, would you be willing to talk a bit more about the EBITDA margin potential at AA&S, how we should be thinking about it if growth and mix continues to improve? Would you be willing to give out a bit more specific on that? Kimberly Fields: Sure. Yes, from -- as you said, fantastic performance in the quarter by AA&S in the segment, and it's a transformation that we've been working on for several years. You've heard me talking about it. As we look out, we anticipate we can see AA&S in the mid-20% range going forward. And really because this is based on structural changes that we've been making in this segment for, as I said, the last few years. One, it started with the transformation in our Flat Rolled business, exiting the standard stainless and focusing our resources on that highest value products through 80/20. And here most recently, we've strengthened our commercial model and restructured long-term agreements, improved pricing and mix. And now we're benefiting from the acceleration around defense and nuclear demand as we look forward. I mentioned in my prepared remarks that A&D is more than double where we were 5 years ago at 44%. And maybe even more impressive, if I look year-over-year at the AA&S segment, A&D is up 34% year-over-year. And so as you said, really focused on structural change, both from a market mix, pricing and contractual agreements. I think the last thing just to mention here that we're also benefiting from is that our business, SA&C on the West Coast is 1 of 3 qualified Western producers of high-purity hafnium and zirconium. And that provides another durable competitive advantage, especially given, as I mentioned in my remarks, supply chain continue to tighten and trade continues to change and create more demand, which allows us to capture that value. So as we think about it and look at AA&S today, we're talking about a business that's fundamentally different from an earnings profile than it was a year ago. And that gives me the confidence to say that we're going to be in that mid-20% range going forward. Operator: Your next question comes from the line of Seth Seifman from JPMorgan. Seth Seifman: I wanted to ask about the outlook in HPMC in the second half. You talked about catching up on some of the revenue. And to the extent that you also see margin expansion, I think the first half margin is kind of in the range -- mid-20s type of range that you've talked about, but had also been thinking about some LTA rollovers and mix improvement driving second half margin expansion there and if that's still part of the outlook? Kimberly Fields: Yes. Seth, so as I think about it and we look at HPMC, we've been talking about through this year, we had a step-up coming in the back half of the year, so here in third quarter. And it is based on a couple of things. Some I talked about. One is the work we're doing through Elevation and the improvements around productivity and taking cost out of our operation. But more importantly, as you mentioned, we've got contractual renewals that are kicking in and step up in pricing, and we are still expecting to see that. In addition, as you said, we had some timing changes with our 2 new facilities that we are in qualifications, one in Mexico and then the EB premium quality titanium. So those are also moving out. As I look at the quarter, we had probably around $30 million to $40 million of revenue that moved from the first half into the second half, where the margins were maybe 40% to 50% shifting into the future periods. And that will accelerate as those facilities continue to ramp and come online. But we do continue to see sequential improvements through the balance of the year based on those new contract pricing. And these are the same drivers that underpin our confidence in that stronger half outlook and the improvement in our HPMC outlook as well. Seth Seifman: And just one clarification, that 40% to 50%, that's kind of an incremental margin cadence that we're discussing there. James Foster: Yes. Operator: Your next question comes from the line of David Strauss from Wells. David Strauss: Rob, you touched on kind of the implied Q4 EBITDA as an exit rate into next year. I guess, is there anything unusual in that number? Is there anything -- any reason as to why we wouldn't kind of -- or you guys wouldn't kind of grow off of that level as we head into '27? And kind of within that, are you thinking as we look at '27 is 50% incrementals for the overall business with what you're talking about for AA&S now? Is that a sustainable kind of run rate to use for incrementals from here? James Foster: Yes. Thanks, David. Well, when I look at Q4 and you think about what that implies for the exit rate for the full year, it implies $1.350 billion of EBITDA. And while I'm not going to give 2027 guidance today, I think I can say that it kind of directionally makes sense. And when you look at those incrementals, we have increased our incrementals from 40% to 50%. So I think it's fair to think about this business from all the structural changes that we've made to be a business that can deliver margins in that 40% to 50% incremental range. But again, we're not going to put a fine point on the 2027 today, but we do expect to give some additional guidance here coming forward. David Strauss: Okay. And a quick follow-up. Kim, you talked about kind of mid-20s EBITDA margin for AA&S. What are you assuming kind of on a go-forward basis, the mix of A&D is within total AA&S sales? I think you're at 44% now. What do you assume going forward? Kimberly Fields: Yes. So as I look forward, we're assuming that mix of A&D continues to stay at that level and it will continue to rise as we renegotiate contracts. I do believe that the tightness in the hafnium and zirconium markets that go into both defense and specialty energy are going to continue to become tight, especially given some of the trade restrictions we're seeing out of China. So I could see that percentage continue to increase as we look across the segment, and that will help support that mid-20s percent from a structural standpoint. Operator: Your next question comes from the line of Myles Walton from Wolfe. Myles Walton: Could you touch on the still high -- mid- to high single-digit outlook for airframe that you talked about? Obviously, the first half of the year down and implying you need to get to something closer to mid-teens to get to the back half of the year. Is that predicated on the facilities coming online or any risk to that? Kimberly Fields: I think you were asking about airframe and our guide and outlook there. From our perspective, as I look at the airframe market, the inventories have largely normalized now, and that's consistent with what we've been expecting and what we've been seeing in our customer order patterns. And so as we look into the second half, as we shared in the last quarter, we anticipate acceleration as we go through this year, and that does seem to be what is lining up. It's important to remember, our orders don't directly align one-for-one with that aircraft build rate, but we're encouraged to hear about the step rate changes in build rates and both airframers are doing well. Our material is getting ordered well ahead of that assembly. And so that confidence for that mid- to high single-digit range is really based on a couple of things. One is our fully committed order book is in place, and we've got order books now extending into 2027. We are seeing, from both airframers, emergent demand in addition to that starting to come in as we go into the fourth quarter here. And we're seeing some pull around widebody as they're starting to prepare for those programs as well. So from where I sit, the inventory normalization is largely behind us. The business is increasing as we expected and we shared with you early in the year, and the underlying production demand is now aligned with their order rates. Operator: Your next question comes from the line of Scott Deuschle from Deutsche Bank. Scott Deuschle: Kim, can you share an update on the lead times you're now seeing across the different product lines the business has? And then also share what drove the sequential backlog growth in the quarter? Kimberly Fields: Sure, sure. So as we think about lead times, I think it's best to look at both backlog and lead time together because they tell the same story and they work together. On the backlog side, I shared in the remarks, we finished the quarter at another record $4.4 billion. That's up 18% year-over-year and 7% sequentially. About 70% of that backlog we expect to convert into revenue over the next 12 months. So we have good visibility into the business. As you look at lead times, and that's where we see those lead times starting to extend for our most differentiated proprietary products. Right now, we're at about 12 months on nickel alloys. We've moved out to 20 months on the premium quality titanium as that tightness continues to expand. And we've been running above 24 months on isothermal forgings here for a little while. So taking together, those are both a really good indicator that demand continues to exceed the available capacity to support these programs and these differentiated materials. Operator: Your next question comes from the line of Andre Madrid from U.S. Bancorp. Andre Madrid: I wanted to see if you could break down the margin impact specifically in the quarter related to the recently signed naval nuclear agreement. Kimberly Fields: Yes. I'll let Rob take that one and share a little bit more color on it. James Foster: Yes. So the naval nuclear contract is essentially a contract and a relationship that we've had for many decades. And essentially, the new contract that just recently began here effective in the second quarter is essentially a $1 billion revenue contract over 5 years. And that is essentially kind of double what the previous 5-year contract was. And so a majority of that increase is price mix with some smaller, I'll call it, 2/3 price mix, 1/3 volume in that contract. And essentially, we saw some of that volume and price recognized in our AA&S segment financials a bit earlier than we were anticipating. So while it wasn't a full quarter of shipments under the new contract, it was a majority of the second quarter was shipping under that new contract. So those are some of the dimensions. Rob Rengel: Operator, we're ready for our final question. Operator: Your last question comes from the line of Seth Seifman from JPMorgan. Seth Seifman: I like the slide that you added with the various capacity additions and kind of how they come online. It feels like as we progress through the quarters, we hear more about incremental demand, whether that's in the defense area. We got the missile frameworks this year and now people talking about lots of low-cost cruise missiles and CCAs. IGT market remains pretty hot. How are you thinking about -- or how are you evaluating -- I assume there are demands for incremental capacity increases beyond what you have on Slide 6. How are you kind of approaching those decisions now? Kimberly Fields: Yes, that list -- as you said, there's demand coming from all of our core markets, and it just continues to ramp, as you mentioned, missiles is another great one. That revenue is up 4x in the quarter. And so yes, we're seeing continued demand. One of the things that we shared was more details around Elevation, our operating system. And so the way we approach this is Elevation is really about making sure that we get as much out of the assets that we already own before we invest in new capacity. And so that is a continuous improvement activity that the teams continue to work on at improving throughput, increasing yields, shortening those cycle times to create that additional capacity and expand margin and generate cash. So once we've captured those and as we start to look out -- and again, our long-term contracts I've shared this in the past, provide a lot of visibility and sharing with our customers, especially around those hot section alloys, where we are producing 6 of 7 and 5 of them, we're the sole source supplier. We have a lot of discussions around that long-term demand and outlook. And we take that then into account as we start to prioritize where do we make investments, where -- what is the timing. And of course, all of these projects have to meet our 30% return thresholds internally. You mentioned our newest facility in Mexico. That is really an important part of our downstream growth strategy. So we've talked a lot about the upstream with melt capacities in titanium and in nickel. But downstream, we've talked about from a bottleneck standpoint, is where the industry continues to have tightness as increasing requirements around quality and testing come into play. And so that facility is going to be a key part of strengthening our ability to support the increased production rates, enhance our position in those programs for the next-generation engine. So there is, as you said, a lot of demand coming in. We are aligning and using Elevation to help us maximize the asset portfolio we have today and then working closely with our customers to align on their future demands on those investments. A great example just to end with is the customer funding that we continue to receive as they support not just the new asset investments, but also those qualifications, which can be very, very long and very involved to get to that qualified product. So a lot of great new assets coming online this quarter and in the back half of the year. We see continued growth and confidence in the outlook, not just for 2026, but as we go into '27 and beyond. So you'll continue to hear from us as we share those results and the great work from the team. Operator: We have reached the end of the Q&A session. I will now turn the call back to Kim Fields for closing remarks. Kimberly Fields: Thank you, operator, and thank you, everyone, for joining today. ATI is significantly transformed from a company that it was 5 years ago. We're more differentiated, more concentrated in attractive markets and capable of stronger margins and cash generation. We are building the ATI of the next decade, and we are only beginning to capture that opportunity in the results you saw in Q2. We look forward to sharing more at our Investor Day later this year. Thank you for joining us, and have a great day. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Ati, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ati wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* That performance is why people listen. 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ATI (ATI) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

ATI Inc. ATI posted adjusted earnings of $1.23 per share for the second quarter of 2026, up 66.2% from the year-ago quarter. The figure beat the Zacks Consensus Estimate of $1.03 by 19.4%. Sales of $1.26 billion rose 10.6% year over year and topped the consensus estimate of $1.22 billion by 3.4%. Strong aerospace and defense demand, favorable pricing and an improved product mix supported the quarter. Backlog reached a record $4.4 billion, up 18% year over year, highlighting sustained demand for the company's aerospace and defense materials. ATI Inc. price-consensus-eps-surprise-chart | ATI Inc. Quote High Performance Materials & Components generated sales of $637.1 million in the second quarter, up 4.6% from $608.8 million in the year-ago period. However, the figure fell short of the consensus estimate of $669 million. The improvement primarily reflected strong demand and pricing for commercial jet engine products. The segment EBITDA margin was 24.1% compared with 23.7% a year ago. Higher volumes and favorable pricing supported the year-over-year margin improvement, partly offset by increased manufacturing and period costs. Advanced Alloys & Solutions posted sales of $624 million, up 17.4% from $531.6 million in the prior-year quarter. The figure surpassed the consensus estimate of $550 million. Growth was primarily driven by aerospace and defense and conventional energy markets. The segment EBITDA margin expanded to 23.7% from 14.4%. Results included a $9.9 million gain from the sale of a previously closed manufacturing facility. Excluding that gain, stronger pricing and a favorable product mix supported the margin improvement. ATI ended the second quarter with cash and cash equivalents of $783 million. Cash provided by operating activities was $131.8 million during the quarter, while capital expenditures totaled $68.6 million. Adjusted free cash flow came in at $68.6 million. Long-term debt stood at $1.81 billion at the end of the quarter. ATI expects third-quarter 2026 adjusted EBITDA in the range of $305-$315 million. Adjusted earnings are projected between $1.31 and $1.37 per share. Management expects momentum to continue into the second half, supported by contracted pricing improvements, a richer product mix and increasing production volumes. For full-year 2026, ATI raised adjusted EBITDA guidance to $1.14-$1.2 billion from its previous outlook of $1.01-$1.06 billion. Adjusted earnings guidance was increased to $4.9-$5.18 per share from $4.2-$4.48 previously. The company also lifted its full-year adjusted free cash flow forecast to $550-$600 million from the earlier range of $465-$525 million. Management expects targeted investments and operational execution to increase available capacity as demand for aerospace and defense materials remains strong. ATI’s shares are up 211.3% over a year compared with the 14.4% growth recorded by the industry. Image Source: Zacks Investment Research ATI currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. Howmet Aerospace Inc. HWM reported second-quarter 2026 adjusted earnings of $1.33 per share, up 46% year over year. The figure beat the Zacks Consensus Estimate of $1.23. For 2026, Howmet Aerospace raised its revenue outlook to $10-$10.1 billion. Adjusted EBITDA is now anticipated between $3.21 billion and $3.25 billion. Axon Enterprise, Inc. AXON reported second-quarter 2026 adjusted earnings of $1.88 per share, down 13.8% year over year. The figure missed the Zacks Consensus Estimate of $1.89 by 0.5%. AXON raised its full-year revenue outlook to 32-34% annual growth, up from 30-32% expected earlier. The updated view reflects continued momentum across the company’s connected devices and software offerings. GE Aerospace GE reported second-quarter 2026 adjusted earnings of $2.02 per share, up 22% year over year. The figure beat the Zacks Consensus Estimate of $1.86 by 8.6%. GE now expects 2026 adjusted revenue growth in the high-teens range, up from its prior low-double-digit outlook. Adjusted earnings are expected in the range of $7.65-$7.85 per share, up from $7.1-$7.4 expected earlier. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ATI Inc. (ATI) : Free Stock Analysis Report GE Aerospace (GE) : Free Stock Analysis Report Axon Enterprise, Inc (AXON) : Free Stock Analysis Report Howmet Aerospace Inc. (HWM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in ATI Inc.? Here are five stocks we like better. ATI exceeded its second-quarter outlook, with revenue up 11% year over year to $1.3 billion and adjusted EBITDA up 37% to $284 million. Strong pricing, product mix and aerospace, defense and specialty-materials demand drove a 440-basis-point margin expansion. The company raised its full-year guidance, projecting adjusted EBITDA of $1.135 billion to $1.185 billion, adjusted EPS of $4.90 to $5.18 and adjusted free cash flow of $550 million to $600 million. ATI ended the quarter with a record $4.4 billion backlog, about 70% of which it expects to convert into revenue over the next 12 months. Advanced Alloys & Solutions led segment performance, with sales up 17% and margins reaching a record 23.7%, while defense revenue rose 36% and a renewed naval nuclear agreement is expected to generate roughly $1 billion over five years. HPMC shipments worth $30 million to $40 million shifted into the second half because of qualification timing, but management expects the deferred demand to convert later in the year. 3 Crucial Aerospace Component Makers That Analysts Love ATI (NYSE:ATI) reported second-quarter results that exceeded its prior outlook, supported by higher pricing, favorable product mix and stronger demand in aerospace, defense and specialty materials. The company raised its full-year guidance for adjusted EBITDA, adjusted earnings per share and adjusted free cash flow. Second-quarter revenue rose 11% year over year to $1.3 billion, while adjusted EBITDA increased 37% to $284 million. The result was $29 million above the high end of ATI's previous guidance, according to Board Chair, President and CEO Kim Fields. Excluding a $10 million asset-sale gain, underlying performance still exceeded the high end of the company's outlook by $19 million. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth AI Fatigue? These 3 Analyst-Upgraded Stocks Offer Real Growth Potential Adjusted EBITDA margin expanded 440 basis points year over year to 22.6%. Fields said the margin gain reflected commercial terms, product mix, execution and operational improvements through the company's Elevation operating system. ATI generated adjusted free cash flow of $69 million during the quarter and $143 million in the first half, compared with a $50 million use of cash in the first half of 2025. ATI ended the quarter with a record $4.4 billion backlog, up 18% from a year earlier and 7% sequentially. Fields said the backlog increasingly includes long-term agreements, sole-source positions and strategic programs that provide multiyear shipment and earnings visibility. The company expects about 70% of the backlog to convert into revenue over the next 12 months. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High Burry Just Sold Amazon, Replaced it With Alibaba, is He Right? The company raised its full-year adjusted EBITDA guidance to $1.135 billion to $1.185 billion, with a midpoint of $1.16 billion representing 35% year-over-year growth. ATI also increased its adjusted EPS outlook to $4.90 to $5.18 and its adjusted free cash flow forecast to $550 million to $600 million. Senior Vice President and CFO Rob Foster said the stronger outlook is supported by contracted pricing, committed customer schedules, a higher structural earnings base in the Advanced Alloys & Solutions segment and High Performance Materials & Components shipments that shifted from the second quarter into the second half. Third-quarter adjusted EBITDA is expected to be $305 million to $315 million. Third-quarter adjusted EPS is projected at $1.31 to $1.37. ATI expects fourth-quarter sales and profit to be its strongest of 2026, with midpoint guidance implying roughly $335 million in EBITDA. The company projects low-20% consolidated adjusted EBITDA margins for the full year and incremental margins of about 50%. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling ATI's Advanced Alloys & Solutions, or AA&S, segment delivered sales of $624 million, up 17% year over year. Segment margin increased 930 basis points to a record 23.7%, reflecting higher pricing, improved execution and a more favorable product mix. Fields said ATI has repositioned AA&S toward higher-value aerospace, defense and specialty-energy applications while exiting lower-value products. Aerospace and defense now represent approximately 44% of AA&S revenue, more than double the share from five years ago. The company expects AA&S EBITDA margins to remain above 20%, and Fields told analysts it sees the potential for margins in the mid-20% range over time. The segment has benefited from ATI's high-purity hafnium and zirconium capabilities. Fields said ATI is one of three qualified Western producers able to make those materials to purity standards required for aerospace and nuclear-energy applications. China’s export limitations have increased the value of those capabilities, she said. Defense revenue rose 36% year over year to an all-time high, led by demand for naval nuclear, missile and missile-defense applications. ATI's renewed naval nuclear agreement extends through 2030 and more than doubles annual revenue relative to the prior contract, according to Fields. Foster said the five-year agreement represents about $1 billion in revenue, with roughly two-thirds of the increase tied to price and mix and one-third tied to volume. ATI raised its full-year defense-growth outlook to the high teens. It continues to expect mid-teen growth in specialty energy, despite a 6% second-quarter decline as production capacity was prioritized for naval nuclear orders with more immediate delivery requirements. High Performance Materials & Components, or HPMC, reported sales of $637 million, up 5% year over year, driven primarily by nickel products for jet engines. Segment margins improved 40 basis points to 24.1%. Qualification timing at ATI's new Chihuahua, Mexico, facility and its titanium electron-beam furnace, EB2, shifted certain HPMC deliveries into future periods. Fields said about $30 million to $40 million in revenue moved from the first half to the second half, with an incremental margin cadence of roughly 40% to 50%. Management said these effects are timing-related and expects the deferred demand to convert in the second half. Completed contract renewals are also expected to improve pricing and mix in jet-engine materials, while productivity measures are intended to support sequential improvement through the remainder of the year. Jet-engine revenue increased 13% year over year and 8% sequentially, with ATI maintaining its forecast for high-teen jet-engine revenue growth for the full year. The company said it supports every major next-generation commercial engine platform and produces six of the seven most advanced nickel-based superalloys, including five for which it is the sole-source supplier. ATI said its Chihuahua facility will support next-generation aerospace-engine testing and inspection, while EB2 expands premium-quality titanium capability and capacity. A new vacuum induction melting furnace remains scheduled to enter service by the end of 2027. ATI expects its nickel investments to increase capacity by approximately 15% to 20% by early 2028 compared with year-end 2025 and contribute about $350 million in annual revenue by 2028. During the quarter, capital expenditures totaled $69 million, including $23 million funded directly by customers. ATI maintained its full-year gross capital expenditure forecast of $280 million to $300 million, partly offset by expected customer-funded capital spending of $55 million to $65 million. Foster said share repurchases remain a priority for incremental free cash flow deployment. ATI repurchased $50 million of stock in the second quarter and had $495 million remaining under its current authorization. Allegheny Technologies Incorporated (ATI) is a global manufacturer of specialty materials and complex components, serving aerospace, defense, oil and gas, chemical processing, medical and other industrial end markets. The company operates through two main segments: High Performance Materials & Components, which produces titanium and nickel-based alloys, stainless and specialty steels, and precision forgings; and Flat-Rolled Products, which supplies stainless steel, nickel and specialty alloy sheet, strip and precision-rolled plate. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "ATI Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

ATI Inc. ATI used its second-quarter call to frame Advanced Alloys & Solutions as a stronger earnings contributor, while reaffirming High Performance Materials & Components as its main long-term aerospace growth platform. Management also raised 2026 guidance on contracted pricing, record backlog and committed customer schedules. ATI’s second-quarter adjusted earnings per share (EPS) of $1.23 topped the Zacks Consensus Estimate of $1.03. Revenues of $1.26 billion also beat the Zacks Consensus Estimate of $1.22 billion. ATI Inc. price-consensus-eps-surprise-chart | ATI Inc. Quote Board chair, president and CEO Kimberly Fields said the higher outlook reflects first-half performance, improved visibility, AA&S strength and confidence in the HPMC ramp. CFO James Foster set 2026 adjusted EBITDA guidance at $1.135 billion to $1.185 billion and adjusted earnings guidance at $4.90 to $5.18 per share. Foster expects third-quarter adjusted EBITDA of $305 million to $315 million and adjusted earnings of $1.31 to $1.37 per share. He sees fourth-quarter sales and profit as the year’s strongest. AA&S has moved toward higher-value aerospace, defense and specialty energy applications through portfolio changes, stronger commercial discipline and better pricing. Aerospace and defense represent about 44% of segment sales. Asked by Seaport Research Partners, CEO Fields said AA&S can reach a mid-20% EBITDA margin range over time, supported by structural changes in mix, contracts and pricing. CFO James Foster told a BTIG analyst that the renewed naval nuclear agreement is a five-year, $1 billion revenue contract, about double the prior five-year agreement. Roughly two-thirds of the increase is price and mix and one-third is volume. HPMC remains ATI’s largest long-term growth platform, although qualification timing at the Mexico facility and EB2 titanium furnace shifted shipments into later periods. In response to JPMorgan, Fields estimated that $30 million to $40 million of revenues moved from the first half into the second half, with 40% to 50% incremental margins on that shifted business. Foster said HPMC should strengthen as contract renewals improve pricing and mix and deferred demand converts. Full-year HPMC EBITDA margin remains targeted in the mid-20% range. CEO Kimberly Fields told a Deutsche Bank analyst that backlog reached a record $4.4 billion, up 18% year over year and 7% sequentially. About 70% is expected to convert to revenue over the next 12 months. CEO Fields said lead times are about 12 months for nickel alloys, 20 months for premium-quality titanium and more than 24 months for isothermal forgings, reflecting demand above available qualified capacity. Fields also raised the full-year defense growth outlook to the high teens. Jet engine revenues are still expected to grow in the high teens, while airframe growth remains in the mid- to high-single-digit range. Adjusted free cash flow guidance increased to $550 million to $600 million. The midpoint implies $430 million of second-half generation. Asked by Seaport Research Partners, Foster said late fourth-quarter shipments will leave some volume in receivables, and ATI plans additional inventory for early 2027. The company continues to target free cash flow conversion above 90%. CEO Kimberly Fields told JPMorgan that ATI first seeks more throughput, yield and shorter cycle times from existing assets before adding capacity. New projects must meet an internal 30% return threshold. CEO Kimberly Fields closed with a focus on Elevation, differentiated capacity and allocating capital toward the highest-return opportunities. Her emphasis remained on execution and contracted demand. CFO James Foster framed the second-half ramp as supported by contracted pricing, committed customer schedules and shipment timing, with both segments expected to contribute to profitable growth. ATI currently carries a Zacks Rank #2 (Buy). Its Growth Score of A and VGM Score of B are favorable under the Zacks Style Scores framework, while its Value Score of D and Momentum Score of D are weaker readings. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The combination gives ATI a favorable Zacks Rank and blended VGM profile, with clear differences across individual styles. The Zacks Rank can change as earnings estimates are revised after the just-reported results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ATI Inc. (ATI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

ATI Exceeds the High End of Q2 Guidance and Raises Full-Year Outlook GAAP diluted EPS up 56% year-over-yearNet income attributable to ATI increased 50%, adjusted EBITDA rose 37% year-over-yearAdjusted EBITDA margin expanded 440 basis points to 22.6% year-over-year Second Quarter 2026 GAAP Financial Results Sales of $1.26 billion, up 11% year-over-year, driven by a 13% aerospace & defense increase Net income attributable to ATI of $151 million, up 50% year-over-year Earnings per share of $1.09 compared to $0.70 per share in second quarter 2025 Second Quarter 2026 Non-GAAP Financial Information(a) Adjusted net income attributable to ATI(a) of $170 million, up 60% year-over-year Adjusted earnings per share(a) of $1.23, compared to $0.74 per share in second quarter 2025 Adjusted EBITDA(a) of $284 million, an increase of 37% year-over-year Adjusted EBITDA(a) as a percentage of sales of 22.6%, compared to 18.2% in second quarter 2025 GuidanceThe Company is providing third quarter and updated full-year 2026 guidance in the table below. DALLAS, Aug. 6, 2026 /PRNewswire/ -- ATI Inc. (NYSE: ATI) reported second quarter 2026 results, with sales of $1.26 billion and net income attributable to ATI of $151 million, or $1.09 per share. Second quarter 2026 GAAP earnings per share were $1.09 and adjusted earnings per share(a) were $1.23. Net income attributable to ATI was $151.0 million and ATI adjusted EBITDA(a) was $284.4 million, or 22.6% of sales. Second quarter 2026 GAAP and non-GAAP results include a gain of $9.9 million, or $0.06 per share, from the sale of a previously closed manufacturing facility in the AA&S segment. Second quarter 2026 adjusted results exclude pre-tax charges of $23.6 million for special items consisting of $10.1 million of start-up and transaction-related costs, $7.0 million of transformation-related costs, $3.9 million of restructuring-related costs, and $2.6 million of losses on the sale of customer accounts receivable. The after-tax impact of these special items was a charge of $18.7 million, or $0.14 per share. First quarter 2026 adjusted results exclude pre-tax charges of $26.4 million for special items consisting of $11.1 million of start-up and transaction costs, $8.1 million of restructuring-related costs, $4.8 million of transformation costs, and $2.4 million of losses on the sale of customer accounts receivable. The after-tax impact of these special items was a charge of $21.0 million, or $0.15 per share. Second quarter 2025 adjusted results exclude pre-tax charges of $7.4 million for special items. The after-tax impact of these special items was a charge of $5.7 million, or $0.04 per share. The Non-GAAP tables included within this release provide the reconciliations of the GAAP to Non-GAAP financial measures and additional details on the special items noted above. "We delivered another solid quarter, with results above the high end of our guidance and adjusted EBITDA up 37% year-over-year on 11% sales growth. This is a clear example of the earnings potential we've been building across both of our segments. Adjusted EBITDA margin expanded 440 basis points to 22.6%, and our backlog reached another record at $4.4 billion, up 18% year-over-year, as demand for our unique aerospace and defense materials continues to outpace available supply," said Kimberly A. Fields, Board Chair, President and CEO. "This quarter reflects the continued evolution of ATI's portfolio toward a more differentiated, higher-margin business, anchored by long-term customer agreements and concentrated exposure in aerospace, defense and specialty energy. "Momentum is carrying into the second half, and we are again raising our full-year guidance for adjusted earnings, EBITDA and free cash flow," Fields added. "Our outlook is supported by contracted pricing improvements, a richer product mix and increasing production volumes as targeted investments and operational execution expand our available capacity." Operating Results by Segment HPMC's second quarter 2026 sales increased $22.8 million, or 4%, compared to first quarter 2026, primarily due to strong demand and pricing for commercial jet engine products. Aerospace & defense sales represented 93% of total HPMC sales in second quarter 2026, unchanged from first quarter 2026. Second quarter 2026 sales increased 5% compared to second quarter 2025, primarily driven by a 10% increase in commercial jet engine sales due to strong demand and pricing. HPMC second quarter 2026 segment EBITDA(a) was $153.5 million, or 24.1% of sales. The sequential decline in segment EBITDA margin was primarily due to higher manufacturing and period costs, including costs associated with revised qualification requirements for our new facility in Mexico and titanium electron-beam furnace. The higher costs were partially offset by increased volume and favorable pricing of jet engine nickel products. The year-over-year increase in the segment EBITDA margin rate was primarily due to higher volume and favorable pricing, partially offset by higher manufacturing and period costs. AA&S second quarter 2026 sales increased $86.8 million, or 16%, compared to first quarter 2026, primarily due to higher sales in the aerospace & defense and conventional energy markets. Aerospace & defense sales increased 19%, driven by higher demand and pricing and represented 44% of total AA&S sales in the second quarter of 2026. The increase in conventional energy sales was mostly due to demand timing. Second quarter 2026 sales increased $92.4 million, or 17%, compared to the prior year quarter, primarily due to higher sales to the aerospace & defense and conventional energy markets. On a year-over-year basis, aerospace & defense sales grew by 34%, including a 90% increase in defense sales, reflecting both higher demand and pricing. AA&S second quarter 2026 segment EBITDA(a) was $147.6 million, or 23.7% of sales, inclusive of a $9.9 million gain from the sale of a previously closed manufacturing facility. Excluding the impact of the gain, the sequential and year-over-year increase in segment EBITDA margin was primarily driven by higher pricing and favorable mix. Corporate Items and Cash Restructuring and other charges: Corporate expenses in the second quarter 2026 were $14.9 million, compared to $17.0 million in the first quarter 2026, and $15.4 million in the prior year quarter. The decrease compared to first quarter 2026 was primarily due to a benefit from an insurance claim, partially offset by higher incentive compensation expense. Corporate expenses were relatively flat on a year-over-year basis. Closed operations and other income/expense was an expense of $1.8 million in the second quarter 2026 compared to expense of $1.2 million in the first quarter 2026, and income of $2.4 million in the prior year quarter. The increase in expense compared to first quarter 2026 was primarily due to changes in environmental reserves. Second quarter 2025 benefited from foreign exchange gains of $1.8 million and a favorable bankruptcy settlement related to an insurance claim of $1.1 million. The second quarter 2026 effective tax rate was 20.0%, compared to an effective tax rate of 11.8% in first quarter 2026 and 22% in second quarter 2025. The higher effective tax rate on a sequential basis was primarily due to the timing and amount of discrete tax benefits, mostly for share-based compensation. The year-over-year comparison was also affected by tax law changes from the One Big Beautiful Bill Act. Cash provided by operating activities was $131.8 million for second quarter 2026, while capital expenditures were $68.6 million. Managed working capital as a percent of annualized sales was 34.3% at the end of second quarter 2026, a decrease of 50 basis points compared to the end of first quarter 2026. In the second quarter 2026, the Company repurchased $50 million of its common stock at an average price per share of $159.53, retiring approximately 0.3 million shares. As of the end of second quarter 2026, total share repurchase authorization remaining was $495 million. ATI will conduct a conference call with investors and analysts on Thursday, August 6, 2026, at 8:30 a.m. ET to discuss the financial results. The conference call will be broadcast, and accompanying presentation slides will be available, at ATImaterials.com. To access the broadcast, click on "Conference Call." A replay of the conference call will be available on the ATI website. This news release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements in this news release relate to future events and expectations and, as such, constitute forward-looking statements. Forward-looking statements, which may contain such words as "anticipates," "believes," "estimates," "expects," "would," "should," "will," "will likely result," "forecast," "outlook," "projects," and similar expressions, are based on management's current expectations and include known and unknown risks, uncertainties and other factors, many of which we are unable to predict or control. Our performance or achievements may differ materially from those expressed or implied in any forward-looking statements due to the following factors, among others: (a) material adverse changes in economic or industry conditions generally, including global supply and demand conditions and prices for our specialty materials; (b) material adverse changes in the markets we serve; (c) our inability to achieve the level of cost savings, productivity improvements, synergies, growth or other benefits anticipated by management from strategic investments and the integration of acquired businesses; (d) volatility in the price and availability of the raw materials that are critical to the manufacture of our products; (e) declines in the value of our defined benefit pension plan assets or unfavorable changes in laws or regulations that govern pension plan funding; (f) labor disputes or work stoppages; (g) equipment outages; (h) business and economic disruptions associated with extraordinary events beyond our control, such as war, terrorism, international conflicts, public health issues, such as epidemics or pandemics, natural disasters and climate-related events that may arise in the future and (i) other risk factors summarized in our Annual Report on Form 10-K for the year ended December 28, 2025, and in other reports filed with the Securities and Exchange Commission. We assume no duty to update our forward-looking statements. ATI: Proven to Perform.ATI (NYSE: ATI) is a global producer of high performance materials and solutions for the global aerospace & defense markets, and critical applications in electronics, medical and specialty energy. We're solving the world's most difficult challenges through materials science. We partner with our customers to deliver extraordinary materials that enable their greatest achievements: their products fly higher and faster, burn hotter, dive deeper, stand stronger and last longer. Our proprietary process technologies, unique customer partnerships and commitment to innovation deliver materials and solutions for today and the evermore challenging environments of tomorrow. We are proven to perform anywhere. Learn more at ATImaterials.com. ATI Inc.Non-GAAP Financial Measures(Unaudited, dollars in millions, except per share amounts) The Company reports its financial results in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This report includes financial performance measures that are not defined by GAAP, including Adjusted net income attributable to ATI, Adjusted EPS, Adjusted EBITDA, Segment EBITDA, Adjusted free cash flow and Managed working capital. The Company uses these non-GAAP financial measures to assist in assessing operating performance on a consistent basis across multiple reporting periods by removing the impact of special items, which can vary from period to period, that management does not believe are directly reflective of the Company's core operations. The Company defines special items as significant non-recurring or non-operational charges or credits, restructuring and other charges/credits, gains or losses from the sale of accounts receivable, strike related costs, goodwill and long-lived asset impairments, debt extinguishment charges, pension remeasurement gains and losses, other postretirement/pension curtailment and settlement gains and losses, and gains or losses on sales of businesses. Adjusted net income attributable to ATI and related Adjusted EPS are calculated by adjusting net income attributable to ATI for the tax-effected impact of special items. We define Adjusted EBITDA as net income, excluding net interest expense, income taxes, depreciation and amortization, and special items. Our measure of segment EBITDA, which we use to analyze the performance and results of our business segments, excludes net interest expense, income taxes, depreciation and amortization, special charges, corporate expenses, closed operations and other income (expense). Our methods of calculating Adjusted free cash flow and Managed working capital are discussed in greater detail below under the headings "Adjusted Free Cash Flow" and "Managed Working Capital," respectively. Management believes presenting these non-GAAP financial measures is useful to investors because it (1) provides investors with meaningful supplemental information regarding financial and operating performance by excluding certain items management believes do not directly impact the Company's core operations, (2) permits investors to view performance using the same metrics that management uses to forecast, evaluate performance, and make operating and strategic decisions, and (3) provides additional information on a period-to-period consistent basis using measures commonly used to analyze companies' operating performance. Management believes that consideration of these non-GAAP financial measures, together with our GAAP financial measures and the corresponding reconciliations, provides investors with a better understanding of the Company's performance and trends that would be absent such disclosures. Non-GAAP financial measures should be viewed in addition to, and not superior to or as an alternative for, the Company's reported results prepared in accordance with GAAP. The following tables provide the calculation of the non-GAAP financial measures discussed in this press release: Adjusted Free Cash Flow Management uses a non-GAAP measure, Adjusted free cash flow, to assess the cash flow generation of the Company's operations. Adjusted free cash flow is defined as the total cash provided by (used in) operating activities and investing activities as presented on the consolidated statements of cash flows, adjusted to exclude cash contributions to the Company's U.S. qualified defined benefit pension plan. Management utilizes this measure to assess the cash flow generation performance of its business as it excludes cash contributions to the Company's U.S. qualified defined benefit pension plan that are periodic rather than recurring. The impact of cash generated from the sale of assets and non-core businesses is included in the measure as the proceeds of such transactions are considered by Management in setting capital budgets to fund capital expenditures. Management believes this measure provides investors with additional meaningful insights as to the Company's ability to generate cash in excess of operational and investing needs. Adjusted free cash flow is not intended to be a measure of free cash flow for management's discretionary use, as it does not consider certain cash requirements such as interest, tax, or other contractually required payments. Further, adjusted free cash flow should be viewed in addition to, and not superior to or as an alternative for, the Company's reported results prepared in accordance with GAAP. Managed Working Capital As part of managing the performance of our business, we focus on Managed working capital, a non-GAAP financial measure that we define as gross accounts receivable, short-term contract assets and gross inventories, excluding the effects of reserves for uncollectible accounts receivable and inventory valuation reserves, less accounts payable and short-term contract liabilities. We assess Managed working capital performance as a percentage of the prior three months' annualized sales. Managed working capital is not intended to replace working capital or other GAAP financial measures or to be used as a measure of liquidity. Management believes this non-GAAP financial measure focuses on the assets and liabilities most closely attributable to our core operations, allowing Management to quantify and evaluate the asset intensity of our business. Further, Management believes this non-GAAP financial measure provides investors with additional insights into the Company's effectiveness in balancing the need to maintain appropriate asset levels to support sales growth and operations while deploying our cash effectively. View original content to download multimedia:https://www.prnewswire.com/news-releases/ati-announces-second-quarter-2026-results-302844440.html

ATI (ATI) came out with quarterly earnings of $1.23 per share, beating the Zacks Consensus Estimate of $1.03 per share. This compares to earnings of $0.74 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +19.42%. A quarter ago, it was expected that this maker of steel and specialty metals would post earnings of $0.88 per share when it actually produced earnings of $1, delivering a surprise of +13.64%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. ATI, which belongs to the Zacks Aerospace - Defense Equipment industry, posted revenues of $1.26 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 3.37%. This compares to year-ago revenues of $1.14 billion. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. ATI shares have added about 78.7% since the beginning of the year versus the S&P 500's gain of 12.8%. While ATI has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for ATI was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.13 on $1.25 billion in revenues for the coming quarter and $4.49 on $4.97 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Aerospace - Defense Equipment is currently in the top 36% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. CAE (CAE), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 12. This civil and military flight simulator company is expected to post quarterly earnings of $0.17 per share in its upcoming report, which represents a year-over-year change of +13.3%. The consensus EPS estimate for the quarter has been revised 0.1% lower over the last 30 days to the current level. CAE's revenues are expected to be $821.35 million, up 3.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ATI Inc. (ATI) : Free Stock Analysis Report CAE Inc (CAE) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research