Investors were pleased with the earnings news from specialty metals manufacturer Allegheny Technologies Incorporated (NYSE: ATI). They bid the stock up some 6% Tuesday, January 29 despite the fact that shipments and operating profits in 4Q2007 slipped and are expected to continue to be soft in 1Q2008.

For the year, Allegheny Technologies posted record sales of $5.45 billion, up 10%. Net income shot up 30% to a record $747 million. Cash flow increased by $121 million so that the company has more cash than debt, operating profit increased by 23%, EPS hit $7.26, and international sales topped $1.5 billion, another record. As a result, Allegheny Technologies initiated a half-billion dollar stock buy-back program and raised the dividend for the third straight year.

Overall, the picture looks good, but there are some negatives. Raw material costs continue to increase. Demand for stainless steel products was "extraordinarily weak," offset in part by stronger demand for tungsten and tungsten carbide products. Demand remains strong in the commercial aerospace and defense segments which results in strong demand for titanium based products for aircraft frames. Supply chain uncertainties with the Boeing 787 Dreamliner, however, may curtail operating profits in that segment.

Given its diverse product offerings, its expanding joint centure in China, Allegheny Technologies appears able to withstand whatever the U.S. economy will do in the coming months.

With stainless steel prices surging, producers of beer are expecting to lose millions of dollars as kegs are stolen and sold for scrap. The industry is fighting back, lobbying for legislation that would bar scrap metal recyclers from buying the kegs without proof of ownership. Kegs can sell for as much as $55 dollars each. But since it can cost the brewers about $150 to buy a new keg, the loss to brewers far exceeds the gain for the thieves. According to the Associated Press's report:

...thieves know metal prices are on the rise and are on the prowl for kegs. They often find empty kegs unsecured -- in alleys and anywhere else restaurants, bars or distributors might store them -- and sell them at scrap yards.

Aha! And you thought stealing kegs was petty crime! But these thieves know metal prices are on the rise, and are making the savvy bet that the value of the kegs exceeds the chances of getting caught and arrested. Many of these thieves are probably reading BloggingStocks to keep up with economic trends!

Here's an idea for how the industry could fight back: With keg customers only standing to get back a deposit of $30 when they return a keg, there's little in the way of a strong incentive to return them, ethics aside. Brewers should consider raising the deposit to $55, an amount large enough that it would be more profitable to return the kegs than sell them for scrap. And what about the cases of kegs stolen from customers by thieves? Offer to buy them back from the scrappers, using the money from the keg deposit.

The brewers are demanding legislation to correct this, but that hardly seems necessary, except in cases where the state sets the keg deposit (which is also weird -- why would there be a state law about what the keg deposit should be?).