Allegheny Tech To Take $5 Million Charge Due To New Health-Care Law

Allegheny Technologies Inc. (ATI) said it plans to take a non-cash charge of $5 million, or about 5 cents a share, in the first quarter, to account for the anticipated impact of the nation's recent health-care overhaul.

The maker of titanium, nickel-based alloys and superalloys, and other specialty metals is the latest company to take a charge to account for increased costs related to changes that will come from the new health-care law. Specifically, the legislation prevents companies from deducting tax-free subsidies it receives from the federal government for providing retirees with prescription-drug benefits.

Other companies to announce similar charges include AT&T Inc. (T), Deere & Co. (DE) and Caterpillar Inc. (CAT). Allegheny has a market capitalization of about $5.1 billion, and reported sales of $3.05 billion in 2009.

The companies are taking the charges now even though changes in the health-care law don't take effect until 2013. Administration officials have said companies are exaggerating the impact of the loss of the deduction because of their general opposition to the new law.

Allegheny's shares closed at $55.73 on Monday. The stock is up 24% this year.

-By John Kell, Dow Jones Newswires; 212-416-2480; [e-mail]