February 4, 2010 / 1:30 PM / in 8 years

UPDATE 3-RTI International posts surprise Q4 loss; shares down

* Q4 adj loss $0.16/shr vs est EPS 2 cents

* Net sales fall 35 percent

* Says results hurt by titanium inventory build-up

* Says uncertain about market conditions

* Shares down as much as 16 pct (Recasts; adds conference call details)

BANGALORE, Feb 4 (Reuters) - RTI International Metals Inc RTI.N reported its second straight quarterly loss, against analysts’ expectations of a profit, on contractual delays and inventory build-up amid sluggish aerospace demand, sending its shares down as much as 16 percent.

The titanium mill products maker, which supplies its products to aerospace majors Airbus EAD.PA, Boeing Co (BA.N), Bombardier (BBDb.TO) and Lockheed Martin Corp (LMT.N), also said it is uncertain about the titanium market in the near term.

“In addition to the global economic upheaval, our commercial aerospace customers experienced extended program delays, resulting in significantly reduced current need for titanium mill products and fabricated parts,” Chief Executive Dawne Hickton said in a statement.

Weakness in air travel and general aviation had led the global airline industry to trim budgets, flights and ground aircraft. Airlines continue to suffer from weak demand, despite nascent signs of a recovery.

Boeing, the second-largest plane maker after Airbus, saw gross orders fall 61 percent to 263 airplanes last year.

RTI said Airbus’ challenges with the A400 military transport and the A380 resulted in the titanium segment operating at less than 50 percent capacity.

“Airbus has preliminarily advised RTI that during 2010 it will require less than half of its 5 million pound contract minimum,” RTI’s CEO Hickton said.

She added there could be further delays or a slower ramp up in the production of the Boeing Dreamliner and consequently, continued losses within RTI’s second-largest segment which fabricates, machines and assembles titanium and other metal parts and components.

The company expects 2010 to remain challenging and looks to an industry recovery in 2011, Hickton said on a conference call with analysts.

However, she expects long-term demand for titanium to be “compelling,” and said that the company’s long-term contracts are secure.

For the fourth quarter, RTI posted a net loss of $57.3 million, or $1.91 a share, compared with a profit of $3.6 million, or 16 cents a share, a year ago.

Excluding items, the company posted an adjusted loss of 16 cents a share, according to Thomson Reuters I/B/E/S.

Net sales plunged 35 percent to $97.3 million, primarily on lower shipments.

Analysts on average expected the company to earn 2 cents a share, excluding items, on sales of $94.9 million.

Shares of the company fell 16 percent to $21.97 Thursday mid-day on the New York Stock Exchange, trailing the broader Dow Jones U.S. Nonferrous Metals Index .DJUSNF, which was down 5 percent. (Reporting by Krishna N. Das and Antonita Madonna Devotta in Bangalore; Editing by Ratul Ray Chaudhuri and Aradhana Aravindan)

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