The shares of Allegheny Technologies Incorporated (NYSE:ATI) are trading 7.46% lower in afternoon trading after the company issued an earnings guidance warning for the second quarter. According to its recent guidance, the company is likely to report a net loss of $16 million to $18 million or $0.15 to $0.17 per share for the quarter. The stainless steel company will release second quarter earnings on July 21. The market was expecting a vastly different performance, anticipating earnings per share of $0.20. Allegheny Technologies Incorporated (NYSE:ATI) said that the lower guidance is primarily because of the poor performance of its Flat Rolled Products unit, which has sustained losses in six out of the last eight quarters. One of the primary reasons for the lower demand of its stainless steel product is the increase in overseas import of lower-budget stainless steel, especially from China. In addition to these imports, the oil and gas industry has cut its requirements in comparison to the first quarter of 2015. The shares of Allegheny Technologies Incorporated (NYSE:ATI) have declined by 25.09% year-to-date.
Smart money seems to have predicted the woes of the company, as the funds tracked by Insider Monkey had a bearish outlook on the stock of the company during the first quarter, with only 13 hedge fund managers investing $359.66 million compared to $416.10 million in the holdings of 17 hedge fund investors three months earlier. It should be noted however that the shares of Allegheny Technologies were down by 14.06% in the first quarter, which accounts for the dip in the value of the aggregate holdings of the funds.
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Insider activity is another parameter that offers an insight into the internal management of the company. However, the insiders at Allegheny Technologies Incorporated (NYSE:ATI) were inactive during the past six months.
With bearish hedge fund sentiment towards the stock, we’re going to go over the recent action surrounding Allegheny Technologies Incorporated (NYSE:ATI).