On the top line, revenues rose 14.3% year/year to $909.9 million, which were just modestly better than expected.
Continued strong sales of next-generation jet engine products, which were up 26% versus the prior year quarter, drove fourth quarter High Performance Materials & Components (HPMC) segment operating profit margins to 12.7% of sales. HPMC segment sales of its specialty materials, including powders, continued to meet its growth expectations.
The company's titanium castings business continues to improve and it's working diligently to meet elevated customer demand levels. The company expects the titanium castings business to be near break-even for 2018, and return to profitability in 2019.
The company's Flat Rolled Products (FRP) segment performed solidly in the fourth quarter, generating over $22 million of segment operating profit, or nearly 6% of sales.
This was its best quarter in the FRP segment in the last five years.
As expected, the third quarter's significantly negative out-of-phase raw material surcharge condition proved to be
temporary. Fourth quarter FRP results benefitted from a stronger mix of high-value products, including higher project-related demand, improved raw material surcharges, and positive impacts from cost reductions.
For the full year 2017, ATI's sales to the key global markets of aerospace and defense, oil & gas, automotive, medical and electrical energy represented 79% of total ATI sales for the year. Sales to the aerospace and defense markets were $1.7 billion and represented 49% of ATI sales: 27% commercial jet engine, 14% commercial airframe, 8% government aero/defense. Direct international sales represented 41% of ATI's 2017 sales.
Looking ahead to 2018, the company expects continued revenue growth and operating margin improvement in its HPMC segment resulting from ongoing aerospace market demand growth and improved asset utilization. The company also expects the FRP segment to build on the operational improvements and product mix benefits achieved in 2017, and to improve operating margins year over year.
However, first quarter results are expected to be negatively impacted by approximately $10 million, compared to fourth quarter 2017, due to required accounting changes on retirement benefit cost capitalization in inventory, as well as lower ferrochrome surcharges.
The company expects 2018 consolidated capital expenditures to range between $100 million to $125 million, reflecting continued strategic investments in capacity to support business growth requirements.