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Arconic (ARNC) to Invest $137M for New Heat Treat Furnace¡ªThe 19th China(Guangzhou)Int¡¯l Heat Treatment, Industrial Furnace Exhibition
11/22/2017 heat treatment expo-furnace expo |
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ARNC declared plans to set up a new horizontal heat treat furnace at its Davenport Works facility, Iowa.
Heat treatment is a necessary stage in the production of certain high-strength products. It is essential for products intended for large industrial and aerospace applications.
The furnace will allow Arconic to heat treat thicker and longer plate, including materials for thick plate stretcher, which started commercial production this year and is the largest thick plate stretcher in the world.
As demand for composite wings (made with monolithic thick plate wing ribs) is increasing, need for thick aluminum plate is also on the rise. According to Arconic, the new capability will address the increasing demand for plate used for aircraft wing skins, ribs and other structural components, mainly in single-aisle builds. Moreover, the investment also creates growth opportunity in other markets including injection molding for automotive applications and semi-conductors for consumer electronics.
Financial assistance from the Iowa Department of Economic Development and the City of Riverdale will support the $137-million investment. The assistance will include financing, tax and R&D credits along with training grants for the workforce at Davenport, once the contract has been finalized.
Construction of the project is anticipated to start in late 2017 while commercial production expected to commence in 2019.
Shares of Arconic have declined 2.3% in the last three months, underperforming the industry¡¯s 0.5% growth.
Arconic logged profit, as reported, of $119 million or 22 cents per share for the third quarter of 2017, down from $166 million or 33 cents a year ago. Results in the quarter include special items including restructuring charges. Barring one-time items, earnings came in at 25 cents per share for the quarter. Results lagged the Zacks Consensus Estimate of 27 cents.
Arconic reaffirmed its full-year adjusted earnings guidance of $1.15-$1.20 per share. However, the company updated its revenue and capital expenditure outlook for 2017.
The company now sees revenues for 2017 in the range of $12.6-$12.8 billion (up from $12.3-$12.7 billion expected earlier). Arconic now expects capital expenditure to be roughly $600 million, compared with its prior view of up to $650 million.
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