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'One of the best years ever': in their fourth-quarter and year-end financial reports to analysts and shareholders, mill executives described another record performance in 2006 and pointed hopefully toward similar results in 2007.

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Allegheny Technologies

Strong Quarter, Full-Year Despite 'Velocity of Change'

Allegheny Technologies Inc., Pittsburgh, reported that 2006 was a record year for sales, segment operating profit and earnings per share. Sales increased nearly 40 percent to $4.9 billion. Segment operating profit reached over $1 billion, or 21.4 percent of sales, and earnings per share was $5.59.

ATI's sales and profitability accelerated throughout 2006, as the fourth was the best quarter of the year, with sales of $1.4 billion.

ATI reported net income for full-year 2006 of $571.9 million on sales of $4.94 billion, compared to net income of $359.8 million on sales of $3.54 billion in 2005.

Net income for fourth-quarter 2006 was $167.1 million on sales of $1.40 billion, up from a net of $118.8 million on sales of $894.4 million in 2005.

"Our strategic goal for 2006 was profitable growth, and we delivered on that goal for our shareholders," said Patrick Hassey, chairman, president and chief executive officer. "The velocity of change was apparent during the year, but ATI demonstrated strong results and future earnings power."

For commodity stainless sheet, the record high cost of nickel and the resulting record raw material surcharge is causing some domestic service center customers to be conservative with their inventories, Hassey said. The company expects to offset much of the domestic service center inventory management actions through increased sales of high-value flat-rolled products and other sales efforts.

ATI expects continued growth driven by increasing demand from the aerospace and defense markets, among others. It plans $400 million to $450 million of self-funded capital investments in 2007.

"Overall, we like what we see in our major markets and believe ATI is positioned and on track for another revenue and earnings growth year in 2007. We have new production capabilities, long-term commitments from customers, and the strong financial position to achieve sustained profitable growth," Hassey concluded.

AK Steel

'A Defining Year' Ends in the Black

A fourth-quarter loss brought on by an obligation to the company's retiree health plan was not enough to dampen a "defining year" for AK Steel.

The Middletown, Ohio-based steel producer recorded a net loss of $49.3 million in the fourth quarter, the result of a $133.2 million "corridor" charge related to retiree benefits. The fourth-quarter loss was slightly behind the same period in 2005, when the company posted losses of $41.5 million in the final three months.

For the year, AK Steel posted net income of $12.0 million, reversing the results of 2005 when the company posted net losses of $2.3 million.

AK Steel President and CEO James L. Wainscott told investors and analysts at the company's year-end conference call that "2006 was AK Steel's defining year. We had to significantly improve our competitiveness, and that is what we did. We took major steps forward to position the company to sustain profitability."

Wainscott said AK improved its position on three fronts: contracts with customers, contracts with raw material suppliers and labor deals. New customer contracts were forged with variable pricing mechanisms tied to input costs, while the company agreed to deals with raw material suppliers through the end of the decade.

On the labor front, AK reached...

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