Dec 2, 2016 2 min read

PITTSBURGH — Allegheny Technologies Inc. said Friday it is suspending its quarterly dividend effective immediately.

The Pittsburgh-based specialty steel producer, which has reported a string of quarterly losses, said in a press release that it expects earnings improvement next year, said suspending the quarterly dividend will save the company nearly $35 million annually.

“We expect ATI’s financial performance to improve significantly in 2017 as a result of strong profitable growth in our high performance materials and components segment, a return to modest profitability in our flat rolled products segment and the aggressive cost reduction actions we have taken since late last year,” said ATI CEO Rich Harshman.

“As earnings improve in 2017 and beyond, the resulting annual free cash flow, after necessary capital expenditures, will be used primarily to reduce debt, improve the funded position of the company’s defined benefit pension plan, and improve liquidity,” Harshman said. “We are focused on creating long-term shareholder value by returning ATI to sustainable profitability, strengthening our balance sheet, and restoring and maintaining financial flexibility and strong liquidity.”

Harshman said that in 2017, the company plans to make a $135 million contribution to its defined benefit pension plan and repay a $100 million term loan due in 2017.

“In addition, we expect capital expenditures to be approximately $120 million in 2017, and to be approximately $100 million annually for several years beyond 2017.”