Wed, Oct. 12, 7:22 PM
- Alcoa (NYSE:AA) shares have tanked 14% since Tuesday morning when it announced worse than expected Q3 earnings and cut its full-year 2016 revenue targets across all areas of the business.
- In addition, Alcoa said it reached agreement to shore up its pension plan after it splits in two, requiring $150M over the next two and a half years; the move demonstrates the risk companies face if they fail to keep up with pension funding in today’s slow growth environment.
- BofA Merrill Lynch downgrades shares to Neutral from Buy with a $30 price target, cut from $33, saying the Arconic aerospace unit will continue to struggle with execution issues and delays for the next few quarters and that the company faces continued margin pressure.
- Goldman Sachs maintains a Neutral rating while lowering the price target to $28 from $30, disappointed in Alcoa's weak organic EBITDA growth in engineering products and solutions, weaker than expected performance in primary metals, and that the company did not reaffirm its earlier 2017 aerospace guidance.
- Fun fact: In the three quarters in which Alcoa has fallen more than 10% following its report, the S&P 500 traded down by 7.5%, 2.6% and 6.5% for the remainder of those three earnings seasons.
Tue, Oct. 11, 2:02 PM
Tue, Oct. 11, 12:45 PM
Tue, Oct. 11, 8:43 AM
- Alcoa (NYSE:AA) -4.2% premarket after reporting worse than expected Q3 earnings, as lower alumina pricing and changes to aerospace delivery schedules hurt revenue.
- At the units that will form Arconic when the company splits, revenue of $3.4B fell 1% Y/Y to $3.4B, reflecting adjustments to delivery schedules in the aerospace industry and softness in North America commercial transportation and pricing pressures.
- Alcoa’s traditional metals operations including smelting, mining and refining reported revenue of $2.3B, roughly flat vs. the year-ago quarter, reflecting continued low alumina prices and the impact of curtailed and closed operations.
- Alcoa reiterated its forecast that global automotive production will rise 1%-4% in 2016 and that aircraft deliveries will be flat to 3% higher this year.
- This is the company's last quarterly report before it splits into two separate entities next month.
Tue, Oct. 11, 7:51 AM
Mon, Oct. 10, 5:30 PM
Mon, Oct. 3, 12:34 PM
- Freeport McMoRan (FCX -0.5%), Barrick Gold (ABX -2.5%) and Pan American Silver (PAAS -0.5%) are upgraded to Buy from Hold at Deutsche Bank, which notes the 12% Q3 rally in commodity prices have enabled the sector to improve their balance sheets via stock issuance, debt refinancing and asset disposals.
- The firm is neutral overall in the metals group, as it continues to believe that material supply cuts still are needed in most commodities and thus does not anticipate prices continuing their upward trend.
- Deutsche Bank says its top picks are ABX and Newmont Mining (NEM -3%) in precious metals, Steel Dynamics (STLD -2.4%) in steel, and Alcoa (AA -1.1%) and Kaiser Aluminum (KALU -1.8%) in aluminum; it upgrades AK Steel (AKS -0.7%), Coeur Mining (CDE -0.8%), Teck Resources (TCK -1.5%) and Goldcorp (GG -4.2%) to Hold from Sell.
Thu, Sep. 29, 10:10 PM
- Alcoa (NYSE:AA) declares quarterly dividend of $0.09/share, in line with previous, if reverse stock split of 1 for 3 is approved.
- Forward yield 1.2%
- Payable Nov. 25; for shareholders of record Nov. 4; ex-div Nov. 2.
- If reverse stock split is not approved, the board would continue with its quarterly dividend of $0.03/share, payable and the record date being the same.
Thu, Sep. 29, 5:51 PM
- Alcoa (NYSE:AA) says its board approved the company's planned split, subject to an Oct. 5 shareholder vote, and will take effect on Nov. 1.
- Alcoa will change its name to Arconic and focus on engineering parts for aerospace and automotive businesses, and spin off a new company, Alcoa Corp., which will contain the traditional mining, smelting and refining divisions; Arconic's NYSE ticker symbol is ARNC.
- Klaus Kleinfeld will serve as Arconic Chairman and CEO; Michael Morris will become Alcoa's non-executive Chairman, and Roy Harvey will be its CEO.
Thu, Sep. 1, 5:40 PM
- Alcoa (NYSE:AA) and Alumina Limited (OTCQX:AWCMF) have amended the terms of a joint venture to address "new realities" after some earlier concerns (and legal challenges) from Alumina on the fate of the partnership following a planned Alcoa split.
- The new arrangement means the two are terminating litigation in Delaware tied to the split, which Alcoa says is on track for the second half.
- The changes to the Alcoa World Alumina and Chemicals JV focus on governance and financial policies, and also simplify dividend and cash management. They also call for raising debt to fund growth projects that the partners agree upon.
- A change of control of either partner would give the other partner more flexibility to go it alone on an expansion or development project, and it would terminate exclusivity and non-compete restrictions.
Mon, Aug. 29, 1:48 PM
- Shares of aluminum makers are higher after privately-held aluminum rolled products producer Aleris agreed to be acquired by China's Zhongwang for $2.33B, in a bet that the U.S. automotive aluminum sector will be the industry's next big growth market.
- Since 2010, Aleris has been owned and controlled by a group led by investment funds of Oaktree Capital Management (NYSE:OAK).
- Aleris is in the midst of a $350M expansion of its Lewisport, Ky., rolling mill to produce automotive body sheet for U.S. auto manufacturers, and hopes to produce 200K metric tons/year and begin shipping in 2017.
- Shares of other publicly traded aluminum companies are up, including Alcoa (AA +2.4%), Century Aluminum (CENX +2.7%), Kaiser Aluminum (KALU +1%) and Constellium (CSTM +12.9%).
Wed, Jul. 27, 5:44 PM
- Alcoa (NYSE:AA) says it plans to undertake a one-for-three reverse stock split, and will hold a special meeting on Oct. 5 to seek shareholder approval.
- Alcoa expects the move will improve liquidity and facilitate trading in the stock.
- Alcoa also says it plans to effect the reverse split and resulting share count reduction to 600M from 1.8B prior to the previously announced separation of the company.
Fri, Jul. 22, 11:23 AM
Tue, Jul. 12, 3:19 PM
- Alcoa's (AA +5.3%) above consensus Q2 results indicate that the mining and smelting business to be separated from the sexier supplier of space-age parts for jets and cars may have a better future than many expected.
- In Alcoa's latest earnings report, the upstream units outperformed analyst estimates even after prices for aluminum fell 11% from a year earlier, a finding that Morningstar's Andrew Lane says "should soften concerns about how well the upstream segments will stand on their own two legs after the split.”
- Alcoa’s upstream segments topped Cowen analyst Anthony Rizzuto’s estimate for adjusted EBITDA by $101M, as the company showed better than expected progress in streamlining.
- Credit Suisse, which reiterates an Outperform rating and $13 price target on AA shares, maintains a positive outlook for the Arconic downstream business set to be spun off, and expects stable operating performance from the upstream division, since demand for aluminum remains fundamentally solid, and AA has downsized the risk of aluminum prices through asset rationalization and the expansion of its highly profitable merchant bauxite business.
Tue, Jul. 12, 12:30 PM| Tue, Jul. 12, 12:30 PM | 12 Comments
Tue, Jul. 12, 9:24 AM