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

 
 
 

20 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

2 hours 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 slashing the workforce of 20,000 by 30 per cent. ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

1 day 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 doub ...
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

Modi government selling off Indian assets: Mamata
Kolkata, Aug 30 (IANS) Accusing the Narendra Modi led BJP government of selling out the country's assets by embracing FDI across sectors, West Bengal Chief Minister Mamata Banerjee Friday warned that such policies would put Indian economy in grave crisis.
 
 
13 die of Ebola in DRC
Kinshasa, Aug 29 (IANS) A total of 13 people, including five doctors, died of Ebola virus disease in the Democratic Republic of Congo (DRC), the country's Minister of Public Health Felix Kabange told Xinhua Friday.
 
 
How birds learnt to fly
New York, Aug 29 (IANS) Birds have an innate ability to maneuver in mid-air, a talent that could have helped their ancestors learn to fly rather than fall from a perch, says a study.
 
 
Millions of mites crawling on your face right now!
New York, Aug 29 (IANS) Are you aware that your face is brimming with living mites that feed on the oil our skin secretes and hide in tiny hair follicles? And no, they are not pooping on you as they store up all the excreta until they die!
 
 
 

Latest from the Network

UN peacekeepers injured in Mali landmine explosion
United Nations, Aug 30 (IANS) A number of UN peacekeepers were injured Friday when their vehicle hit a landmine in northern Mali, a UN spokesman said. "The United Nations Multidimensional Integrated Stabilisation...
Read more on Politics Balla
 
Kanye West is supporting Rob Kardashian
Kanye West has become one of Rob Kardashian's ''biggest cheerleaders.'' The 37-year-old rapper, who is married to the sock designer's sister Kim Kardashian West, has started reaching out to support his brother-in-law,...
Read more on Celebrity Balla
 
Joan Rivers's condition remains serious
Joan Rivers remains in a ''serious'' condition in a New York City hospital. The 'Fashion Police' host, who was placed in a medically-induced coma after she went into cardiac arrest and stopped breathing during minor...
Read more on Celebrity Balla
 
Suri Cruise reunited with lost dog
Suri Cruise has been reunited with her lost dog. The eight year old - the daughter of Tom Cruise and Katie Holmes - was devastated when her new Chihuahua, Honey, disappeared in Beverly Hills earlier this month and...
Read more on Celebrity Balla
 
850,000 displaced in one month in Iraq
Geneva, Aug 30 (IANS/EFE) The Islamic State minlitants advancements have forcibly displaced 850,000 people in one month, the International Organisation for Migration(IOM) said Friday. The total number of people who...
Read more on Politics Balla
 
US identifies citizens fighting for Islamic State
Washington, Aug 30 (IANS/EFE) US intelligence and law enforcement agencies have identified around a dozen of its citizens, who have traveled to the Middle East to join jihad led by the Islamic State, officials said....
Read more on Politics Balla
 
Keira Knightley goes topless
London, Aug 30 (IANS) British actress Keira Knightley showed her upper body for a racy magazine photoshoot. The "Pirates of the Caribbean" actress stripped off for fashion magazine Interview. In the photo, she appears...
Read more on Celebrity Balla
 
UN human rights report on Ukraine distorts facts: Russia
Moscow, Aug 30 (IANS/ITAR -TASS) The latest report of office of the UN High Commissioner for Human Rights distorts the situation on the Russia-Ukraine border, Russia's foreign ministry said Friday. "The authors of the...
Read more on Politics Balla
 
Happy to call Brad Pitt my son-in-law: Voight
Los Angeles, Aug 30 (IANS) Actor Jon Voight is happy that now he can call Brad Pitt his son-in-law. Voight is happy about the wedding of his daughter Angelina Jolie to her partner of nine years and although he wasn't...
Read more on Celebrity Balla
 
Modi government selling off Indian assets: Mamata
Kolkata, Aug 30 (IANS) Accusing the Narendra Modi led BJP government of selling out the country's assets by embracing FDI across sectors, West Bengal Chief Minister Mamata Banerjee Friday warned that such policies...
Read more on Politics Balla