Alcoa posts narrower net loss, meets estimates
Alcoa Inc
The company took big charges for shutting down two smelters and for changes in federal health-care reform, but it said its markets were gradually improving as both policy trends and consumer sentiment were positive for aluminum demand.
We continue to see restructuring charges, said Brian Hicks, co-manager of the natural resources fund of U.S. Global Investors in San Antonio, Texas.
This seems like it's been an ongoing exercise for Alcoa, with restructuring and special one-time charges. It makes the quarter a little bit messy. On a brighter note perhaps, they were able to contain costs this quarter.
The net first-quarter loss was $201 million, or 20 cents per share, compared with a loss of $497 million, or 61 cents per share, in the same quarter of 2009, the Pittsburgh-based company said.
Alcoa reported an operating loss of 19 cents per share, while revenue rose to $4.89 billion from $4.15 billion.
Excluding special items, the company reported a profit of 10 cents per share, which was the consensus of Wall Street analysts polled by Thomson Reuters I/B/E/S, even though they expected $5.238 billion in revenue.
Alcoa said restructuring and environmental costs, primarily from the decision to permanently close two smelters in Badin, North Carolina, and Frederick, Maryland, totaled $135 million, or 13 cents per share.
It also took charges for tax impacts totaling $112 million, or 11 cents per share, primarily as a result of changes in federal health care laws; and $48 million, or 5 cents per share, for mark-to-market changes in derivatives and the impact of power outages.
Alcoa said results from continuing operations in the first quarter improved $72 million over the fourth quarter 2009, driven by higher realized prices for alumina and aluminum and productivity gains, which were partially offset by the impact of inventory accounting, lower volumes and higher energy costs.
Aluminum, used in automobile and aircraft manufacturing, and for kitchen wrap and beverage cans, reached a peak of $3,380 per tonne in July 2008. But it slumped 35 percent later as the global economy went into recession and has only slowly risen.
Although the metal was selling at an 18-month high over $2,400 per tonne on Monday, it only gained about 3.3 percent during the first quarter.
The company reported increased business in its alumina, aluminum and engineered products sectors, but said there was a drop in its beverage can market as a result of its decision to curtail sales to a North American can sheet customer.
Alcoa stock was up 2 cents at $14.59 in afterhours trading on the New York Stock Exchange after closing 18 cents higher at $14.57.
(Reporting by Steve James; and Andre Grenon)
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