360° Coverage : Alcoa Q1 Profit Comes In Above Expectations Despite Continued...

2 Updates

Alcoa Q1 Profit Comes In Above Expectations Despite Continued Drag From Primary Metals Unit

Apr 8 2014, 4:20pm CDT | by

The unit that once prompted one Deutsche Bank analyst to write an ode to the value of its spinoff, primary metals, has proven to be a continued thorn in Alcoa's side. This is one of the conclusions...

Filed under: news

 
 
 

28 weeks ago

Alcoa Q1 Profit Comes In Above Expectations Despite Continued Drag From Primary Metals Unit

Apr 8 2014, 4:20pm CDT | by

The unit that once prompted one Deutsche Bank analyst to write an ode to the value of its spinoff, primary metals, has proven to be a continued thorn in Alcoa's side. This is one of the conclusions from the aluminum producer’s first quarter fiscal 2014 earnings results, which it released Tuesday afternoon to officially kick off spring’s earnings season.

Alcoa reported $5.5 billion in first quarter revenue, a figure that beat Street expectations of $5.4 billion but marks a 2% decline over the prior quarter and a 6% decline from the first quarter of 2013, a decline that’s largely due to an 8% drop in year-over-year aluminum prices as well as capacity reductions in the company’s struggling primary metals unit, which reported negative $15 million in first quarter after-tax operating income, an improvement over negative $35 million in the prior quarter but down from a (positive) $39 million in the same period in 2013.

Alcoa’s first quarter profit, meanwhile, came in on the negative side: net revenue, including special items, was actually a loss of $178 million, or a loss of 16 cents per share compared to a gain of 14 cents per share during the same time in 2013. Excluding special items, like $276 million spent on smelting capacity reductions (smelting is the process by which aluminum is procured from ore), net income came in at a $98 million gain, resulting in earnings of 9 cents per share. This, too, beat the analyst consensus, which was calling for a gain of 5 cents per share.

“We hit record downstream profitability, nearly tripled results in the midstream, and strengthened our upstream business for the 10th quarter in a row,” Klaus Kleinfeld, Alcoa chairman and CEO, said in a statement Tuesday afternoon, referring to the production of aluminum, the transportation of the metal and the exploration/procurement of aluminum, respectively. “Our transformation is accelerating – we’re powering growth in our value-add businesses and aggressively reshaping our commodity business.”

Among the initiatives included in Kleinfeld’s reference to “reshaping” is Alcoa’s late March announcement that revealed it was curtailing 147 tons of smelting capacity in Brazil due to due to challenging global market conditions in primary aluminum and increased costs that have made the smelters uncompetitive. This change will take place by May of this year, and the company plans to close an additional 274 tons of smelting — aluminum procurement– capacity throughout the year. Once all these curtailments and closings are completed, Alcoa says it will have reduced its smelting capacity by 1.2 million metric tons, or 28 percent, since 2007.

Looking ahead to 2014, Alcoa did not provide specific earnings and revenue guidance, though it did say that it expects an increase in demand from the aerospace industry thanks to demand for commercial aircraft and business jets, as well as increased demand from the automotive industry, packing industry and construction industry. Alcoa reiterated its expectation that global aluminum demand will grow 7% in 2014.

Following the release of the earnings report, shares of Alcoa increased 2% in after-hours trading after finishing Tuesday’s regular trading session with an 0.48% gain. Year-over-year, the stock is up 48.6%.

 
Update
2

7 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and sla ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

7 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of MH370 ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Spanish nurse cured of Ebola
Madrid, Oct 21 (Xinhua) Spanish nursing auxiliary Teresa Romero was pronounced cured of the Ebola virus disease according to World Health Organisation (WHO) guidelines after the results of a second test confirmed Tuesday that she no longer had the virus in her blood.
 
 
Clinical trials of Ebola vaccine start Nov 1 in Switzerland
Geneva, Oct 21 (IANS/EFE) The World Health Organisation (WHO) announced Tuesday that it will begin clinical trials Nov 1 in Switzerland of one of the two anti-Ebola vaccines currently under development.
 
 
Colombia to launch world's first floating gas liquefaction plant
Bogota, Oct 21 (IANS/EFE) The world's first floating gas liquefaction plant is due to begin operating next year off the coast of northern Colombia under a pact between Canada-based Pacific Rubiales Energy and Belgian shipbuilder Exmar.
 
 
Paralysed man walks again after pioneering cell therapy
London, Oct 21 (IANS/EFE) A paralysed man has been able to walk again after therapy that involved transplanting cells from his nasal cavity into his spinal cord, the BBC reported Tuesday.
 
 
 

Latest from the Network

Keira Knightley was 'a goody two-shoes'
Keira Knightley was ''a goody two-shoes'' when she was younger. The 29-year-old actress claims she was a ''boring'' well-behaved child and never skipped school because she didn't want to upset her parents or teachers....
Read more on Celebrity Balla
 
Kat Dennings is in love with Kim Kardashian
Kat Dennings thinks Kim Kardashian's butt is ''amazing.'' The '2 Broke Girls' actress was ''very nervous'' when the 'Keeping Up with the Kardashians' star filmed a cameo for the show's 80th episode and was too shy to...
Read more on Celebrity Balla
 
Taylor Swift doesn't 'need some guy' for inspiration
Taylor Swift is ''figuring out how to cope'' with life on her own. The 'Shake It Off' hitmaker hopes her upcoming album, '1989,' will prove she doesn't ''need some guy'' to help her ''make a great record'' or to feel...
Read more on Celebrity Balla
 
Sarah Hyland is 'great'
Sarah Hyland says she is ''great'' after obtaining a restraining order against her ex-boyfriend. The 'Modern Family' star is happy to be focusing on her career again after a judge recently granted her a three-year...
Read more on Celebrity Balla
 
India re-elected to UNHRC for two years
United Nations, Oct 21 (IANS) India was Tuesday re-elected to the United Nations Human Rights Council (UNHRC) for the term 2015-2017 in a keenly contested election in the UN General Assembly in New York. Other...
Read more on Politics Balla
 
Spanish nurse cured of Ebola
Madrid, Oct 21 (Xinhua) Spanish nursing auxiliary Teresa Romero was pronounced cured of the Ebola virus disease according to World Health Organisation (WHO) guidelines after the results of a second test confirmed...
Read more on Business Balla
 
Gurdwara closed in Belgium
Brussels, Oct 21 (IANS) The mayor of the town of Vilvoorde in Belgium, Hans Bonte, has ordered the closure of the local gurdwara, Guru Nanak Sahib, for one month. Belgian media Tuesday charged that the Sikh temple "...
Read more on Politics Balla
 
Air strikes kill 28 militants in Pakistan
Islamabad, Oct 21 (IANS) At least 28 militants were killed when the Pakistani army launched an air strike in the country's northwest tribal town of Datta Khel Tuesday, military said. In a statement, Inter Services...
Read more on Politics Balla
 
Report reveals large-scale torture in China's 'Black Jails'
Beijing, Oct 21 (IANS/EFE) The use of hotels and factories as clandestine prisons where thousands of people -- mostly women -- are tortured to prevent their complaints against the government from coming to light has...
Read more on Politics Balla
 
Clinical trials of Ebola vaccine start Nov 1 in Switzerland
Geneva, Oct 21 (IANS/EFE) The World Health Organisation (WHO) announced Tuesday that it will begin clinical trials Nov 1 in Switzerland of one of the two anti-Ebola vaccines currently under development. WHO Assistant...
Read more on Business Balla