Alcan 2Q Profit Down on Forex Impact, Misses, Sales Rise 8%

Includes: AL (defunct), RIO
by: Steven Towns

Alcan Inc., which is being acquired by Rio Tinto plc for $38.1 billion, reported 2Q net income fell 3.7% to $438m, or $1.17/share. Forex losses due to a strong Canadian dollar nearly doubled to $193m. Adjusted EPS of $1.62 (+9.5% y/y) missed analysts' average estimate of $1.71. Revenues rose 8.2% to $6.61b, topping analyst expectations of $6.46b. Alcan benefited from higher aluminum realizations, better pricing and mix in the Engineered Products and Bauxite & Alumina businesses and increased volumes across most businesses. Aluminum prices gained 5.8% on the quarter, but profit at its metals unit fell 3.9% due to higher materials and energy costs. In a press release, CEO Dick Evans commented, "At the aluminum industry level, extremely strong Chinese demand growth should underpin ongoing favourable conditions. We continue to expect our financial results to reflect not only these favourable industry conditions, but also Alcan's very strong competitive position." NYSE-listed shares of Alcan gained 0.3% to $96.80 on Monday. AL-EarningsChart-7-31-2007

Sources: Press release, Bloomberg, MarketWatch
Commentary: Takeout Values For Miners Listed By DesjardinsWhat Does Rio Tinto's Takeover of Alcan Mean for the Rest of the Industry?Alcan Acquiesces To Cash Deal With Rio Tinto
Stocks/ETFs to watch: Alcan Inc. (AL (defunct)), Rio Tinto plc [ADR] (RTP), Alcoa Inc. (NYSE:AA), BHP Billiton Limited [ADR] (NYSE:BHP)

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