Why Is ATI (ATI) Down 2.6% Since Last Earnings Report?

Core Viewpoint - ATI reported strong earnings for Q3 2025, with adjusted earnings exceeding estimates, but net sales fell short of expectations, indicating mixed performance in the market [2][3]. Financial Performance - ATI recorded a profit of $110 million or 78 cents per share for Q3 2025, an increase from $82.7 million or 57 cents in the same quarter last year [2]. - Adjusted earnings were 85 cents, up 42% from the previous year's 60 cents, surpassing the Zacks Consensus Estimate of 75 cents [2]. - Net sales for Q3 were $1,125.5 million, missing the Zacks Consensus Estimate of $1,139.8 million, but showing a 7% year-over-year increase [3]. Segment Highlights - HPMC segment reported sales of $602.9 million, up 9% year-over-year, but below the consensus estimate of $623 million; segment EBITDA rose 18.3% to $145.8 million [4]. - Advanced Alloys & Solutions (AA&S) recorded sales of $522.6 million, a 4.8% increase from $498.8 million, exceeding the consensus estimate of $507 million; however, segment EBITDA decreased by 23% year-over-year to $90.4 million [5]. Financial Position - As of Q3 2025, cash and cash equivalents were $372.2 million, down 8.6% year-over-year; long-term debt decreased by 7.6% to $1,715.2 million [6]. Outlook - For Q4 2025, adjusted EBITDA is expected to be between $221 million and $231 million, with full-year guidance raised to $848 million-$858 million from the previous $810 million-$840 million [7]. - Adjusted earnings per share for Q4 are projected at 84-90 cents, and for the full year at $3.15 to $3.21, an increase from earlier expectations of $2.90-$3.07 [7]. - Adjusted free cash flow for the full year is estimated between $330 million and $370 million, with capital expenditures anticipated to be $260 million to $280 million [7]. Market Sentiment - Since the earnings release, there has been an upward trend in estimates for ATI, indicating positive market sentiment [8][10]. - ATI holds a Zacks Rank 2 (Buy), suggesting expectations for above-average returns in the coming months [10]. Industry Comparison - ATI operates within the Zacks Aerospace - Defense Equipment industry, where competitor Hexcel (HXL) reported a slight revenue decline of 0.1% year-over-year, with a Zacks Rank 4 (Sell) [11][12].