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
Mon, Jul. 11, 5:37 PM
Mon, Jul. 11, 5:30 PM
- Alcoa (NYSE:AA) +4% AH after beating expectations for Q2 earnings and revenues, and saying its plan to break up into two separate companies later this year remains on track.
- AA says its traditional smelting and mining operations reported $2.3B in revenues, up 7% Q/Q with a boost from higher aluminum pricing, as operating earnings rose to $150M; at the units that will form Arconic, which will focus on engineering parts for aerospace and automotive businesses, revenue rose 1% Y/Y to $3.5B as operating earnings gained 3% to $294M.
- AA says large commercial aircraft deliveries fell ~1% Y/Y in the six first months of FY 2016 but expects a 6% gain during H2 over H1 followed by strong double-digit growth in 2017, and reiterates its forecast for global automotive production growth in 2016 of 1%-4%.
- The company forecast a global aluminum deficit of ~775K metric tons as 5% growth in global aluminum demand offsets an expected 2.5% increase in global aluminum supply; in April, it had projected a 2016 a 1.1M metric ton global aluminum deficit, with an increase of 5% in global aluminum demand offsetting an expected 2% rise in global aluminum supply.
Mon, Jul. 11, 4:05 PM
Sun, Jul. 10, 5:35 PM
Thu, Jun. 30, 12:11 PM
- Alcoa (AA -0.2%) says it won a long-term contract to supply aluminum sheet and plate to Embraer (ERJ +0.1%) in a deal valued at ~$470M.
- Alcoa says it will supply materials for ERJ’s new E2s, the second generation of its narrow-body medium-range jet airliner, which are scheduled to enter into service in 2018.
- Alcoa says the deal makes it the sole supplier to ERJ for proprietary wing skins and fuselage sheet on the E2 line of jets; other Alcoa plate products, used in key applications such as wing ribs, fuselage frames and other structural parts of the aircraft, also are part of the contract.
Wed, Jun. 29, 8:24 AM
- Alcoa (NYSE:AA) offers further details of its plan to split in two, including moving some debt to its spun-off company in an effort to assist the credit rating of the remaining manufacturing entity.
- Alcoa will spin off the less-promising businesses into a company that keeps the Alcoa name and would continue trading on the NYSE under the AA symbol, while retaining the businesses that make products for the aerospace, automotive, transportation, and building and construction markets, which will be renamed Arconic and change its ticker symbol to ARNC.
- Alcoa says at least 80.1% of the spun-off company will be distributed to shareholders and 19.9% of the spun-off smelting business will be owned by Arconic.
- Alcoa would borrow ~$1B and return “a substantial portion” to Arconic, and Alcoa would get a revolving credit facility of as much as $1.5B; the division of debt and other liabilities is critical in implementing the plan to create a self-sufficient metal-producing company and achieve an investment-grade credit rating at the leaner industrial company that will remain.
- AA +0.7% premarket.
Wed, Jun. 29, 3:43 AM
- Alcoa (NYSE:AA) investors are hoping for more detail this morning on how the biggest U.S. aluminum producer will divide about $13B of liabilities as it prepares to split itself into two.
- That will show whether CEO Klaus Kleinfeld can achieve his target of an investment-grade manufacturing company, renamed Arconic, and a viable aluminum-producing company retaining the Alcoa name.
Wed, Jun. 1, 5:58 PM
- Alcoa (NYSE:AA) has not yet detailed how its debt will be split over its two new companies, but joint venture partner Alumina (OTCQX:AWCMF) is trying to make sure it does not share in the burden, and its concerns have led to an exchange of words and a series of meetings between the two companies, and to a lawsuit brought by Alcoa.
- Alumina is "worried about the debt," and likely is concerned about potential credit rating changes on its interest in the companies' partnership, says Sterne Agee CRT analyst Joshua Sullivan.
- Alcoa is expected to signal in its Form 10 filing later this month how it will structure its split, and investors then will get a read on how the company plans to handle its debt - particularly its big pension obligation; ahead of the filing, Alumina is "looking for concessions," Sullivan says, adding that Alcoa's lawsuit "adds an element of risk to the timing" of the transaction.
- Alcoa says the split remains on track to be completed during H2 of this year, and that it does not need Alumina's consent.
- Now read What will post-spinoff Alcoa look like?
Fri, May 27, 12:57 PM
- Alcoa (AA -0.6%) says its joint venture partner Alumina (OTCQX:AWCMF) is threatening to interfere with its plan to split in two if concessions are not granted.
- Alcoa says in a lawsuit that the Australian company says it will block Alcoa’s separation of the manufacturing business from its legacy smelting and refining segment later unless a JV agreement between the two companies is revised.
- The two companies set up a 60-40 JV involving bauxite and aluminum mining a along with manufacturing operations in 1994; Alumina claims the JV agreement gives it consent rights over Alcoa’s planned break-up and will only agree if Alcoa grants “wholly unwarranted and highly valuable concessions,” Alcoa says in court filings.
Mon, May 23, 2:19 PM
- Alcoa (AA +2.2%) is higher after BofA Merrill upgrades shares to Buy from Neutral with a $11 price target, up from $10.50, saying AA stock has become increasingly correlated with price of aluminum even as the metal is becoming less of a factor in the company's earnings.
- Alcoa has been increasing its investment in aerospace, and while the segment has been disappointing over the last 18 months, BofA sees an upswing coming as the Firth Rixson acquisition leverages the company toward the engine portion of aerospace, which the firm views as more of a structural growth story.
- BofA believes few positive aerospace developments are priced in the shares, and that Alcoa will see a positive engine demand catalyst when the Firth Rixson forge becomes operative in H2 of this year.
- Now read Alcoa: Aluminum pricing looks set to stabilize and head higher
Mon, May 2, 3:56 PM
- Alcoa (AA -1.7%) says it reached agreement on a new power deal to prevent the closure of its 279K metric tons/year Intalco aluminum smelter in Washington state.
- Alcoa says the agreement with the Bonneville Power Authority will be effective July 1 and last through February 2018.
- The plant reportedly will continue to operate 2.5 potlines, which is equivalent to ~80% of capacity.
- Now read Alcoa: Breakout time, baby
Thu, Apr. 14, 5:32 PM
- China has agreed to scrap $1B in export subsidies on a range of products from metals to agriculture and textiles, according to the U.S. Trade Representative, but some industry executives are skeptical about the deal's impact.
- Reuters reports one source says the agreement is not comprehensive enough to do much to help the U.S. steel industry, given its focus is only on specialty steel products.
- U.S. Steel (NYSE:X) President/CEO Mario Longhi is cautious about China's move: "China has been saying a lot of things for the past couple of decades... We need to see the proof in actions, not just in verbiage."
- Wall Street mostly ignored the agreement, with stocks in related sectors showing a mixed bag in today's trade: AA +2.3%, AKS +1.3%, NUE +0.4%, STLD +0.3%, X -0.8%, FCX -0.8%.
- Now read AK Steel, U.S. Steel downgraded to Sell at UBS
Alcoa, Inc. engaged in lightweight metals engineering and manufacturing. Its products are used worldwide in aircraft, automobiles, commercial transportation, packaging, oil and gas, defense, and industrial applications. The company operates its business through four segments: Alumina, Primary... More
Sector: Basic Materials
Country: United States
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