Today, 5:38 PM
Today, 4:44 PM
- Alcoa (NYSE:AA) -4.7% AH following a sharp Q3 earnings miss in results some analysts will view as a bad sign for corporate profits this quarter, even as expectations were very low to begin with.
- Alcoa reaffirms its projections that global aluminum demand will rise by 6.5% in 2015 and double between 2010 and 2020, adding that global demand growth is tracking ahead of the projection so far this decade.
- Alcoa indicates China's industrial economy is slowing more rapidly than expected: The company cuts its estimate for 2015 automotive production growth to up 1%-2% from up 5%-8%, lowers its projection for 2015 heavy duty truck and trailer production growth to down 22%-24% from down 14%-16%, reduces its 2015 commercial building and construction sales growth to up 4%-6% from up 6%-8%, and keeps its 2015 packaging estimate unchanged at up 8%-12%.
- In Q3, Alcoa’s smelting division swung to a $59M loss vs. a $245M operating profit in the year-ago period, as its average price charged to outside customers, fell 25% to $1,901/metric ton.
- Operating profit in global rolled products fell 10% Y/Y to $62M and engineered products fell 2.6% to $151M, while bauxite processing surged threefold to $212M.
Today, 4:04 PM
Yesterday, 5:35 PM
Yesterday, 9:48 AM
Mon, Oct. 5, 2:35 PM
- Alcoa (AA +9.2%) powers higher after announcing its new $1B contract with Airbus for high-tech, multi-material aerospace fastening systems.
- Shares also are helped by a new Buy recommendation and $14.50 price target at Gabelli, which says the recently announced split of upstream and midstream/downstream businesses highlights upside and crystallizes the margin of safety.
- Gabelli says assets of the "Value Add" entity are worth $9.50/share in 2015 increasing to $11/share in 2016, net of estimated debt and pension, with assets of the "Upstream" entity worth upwards of $4/share essentially free to a buyer based on the current price.
- The firm also sees growth opportunities in Alcoa's auto sheet segment from body-in-white patents and Micromill technology, and says Upstream assets are sufficiently low cost to survive extremely weak pricing driven by oversupply.
Mon, Oct. 5, 9:13 AM
- Alcoa (NYSE:AA) +1.8% premarket after announcing it signed a ~$1B order from Airbus (OTCPK:EADSF, OTCPK:EADSY) for high-tech, multi-material aerospace fastening systems, Alcoa's largest fastener contract ever with the aircraft manufacturer.
- Alcoa says the deal strengthens its position on new, high-growth Airbus platforms including the A350 XWB and A320neo, and reinforces its position on existing aircraft such as the A330.
- Alcoa will supply advanced fastening systems, such as those that enhance the assembly of aircraft panels and engine pylons on newer airplanes with sophisticated design features.
Wed, Sep. 30, 2:23 PM
- Alcoa (AA +0.7%) reportedly is headed for its best day in the bond market in at least a year, as the company eases concerns that creditors would be left with a less attractive part of the businesses in the company's plan to split itself in two.
- AA's $1.25B in notes due 2024 surged as much as $0.1275 on the dollar, narrowing the spread over U.S. Treasurys to 360 bps from 561 bps on Monday when the split plan was announced.
- The bonds had plunged after the initial announcement left investors unsure how much of AA’s $8.7B of debt would end up at each company. and the rebound came after AA said debt would be retained by the as-yet-unnamed manufacturing company.
- Alcoa’s follow-up statement "may make debt investors feel better, but they’d probably feel the best not having the split-off because they’ve got all of the EBITDA to service the debt," says Jeff Golman, head of investment banking for Mesirow Financial.
Tue, Sep. 29, 10:39 AM
- Alcoa’s (AA +1.6%) plans to split into two publicly traded companies will not generate any savings and could lead to modestly higher overhead costs, J.P. Morgan's Michael Gambardella says, suggesting Alcoa would be wise to take a second step and combine the upstream business with another large aluminum producer, which should create more value in a depressed metal price environment.
- Alcoa tried to do this in 2007 when it made a hostile offer for Alcan, which eventually was bought by Rio Tinto (RIO +1.9%), and the analyst thinks a similar-sized producer, including Rio’s aluminum business, would be a good fit for Alcoa that could generate meaningful synergies.
- Gambardella says Alcoa's previous offer leads him to believe the company thought the Alcan aluminum assets - now the majority of Rio’s aluminum assets - were the best fit in the industry with its own upstream assets.
Mon, Sep. 28, 3:12 PM
- Alcoa's (AA +3.6%) news that it will break itself in two, separating a faster growing plane and car parts business from traditional aluminum smelting operations, is one of the few bright spots in an otherwise difficult day in the stock market.
- Sterne Agee CRT's Josh Sullivan says the split could unlock significant value in Alcoa’s shares, since it was hard for investors to see the “inherent value” in the value-added business because of the sharp drop in commodity prices that was hitting the upstream business.
- At the same time, the analyst says it is too early to change his Neutral rating on the stock, as other issues come into play during a spinoff, including how pension liabilities, debt and environmental issues are treated by the new structures.
Mon, Sep. 28, 9:13 AM
Mon, Sep. 28, 6:48 AM
- Alcoa (NYSE:AA) announces it will split into two separate public companies.
- An "Upstream Company" will focus on bauxite, alumina and aluminum - while a "Value-Add" entity is slated to focus on innovation for attractive growth markets.
- The transaction is expected to be completed in the second half of next year.
- AA +5.18% premarket to $9.55.
Fri, Sep. 25, 12:06 PM
Thu, Sep. 24, 3:18 PM
- Alcoa (AA -0.1%) says it has completed a $300M expansion project in Tennessee that will provide aluminum sheet to automakers, its second major automotive expansion in less than two years as it continues to see strong long-term customer demand.
- The amount of aluminum body sheet content in North American vehicles is expected to grow by 3x from 2012 to 2015 and increase 11x by 2025 from 2012, and Alcoa estimates it will grow its automotive sheet revenue ~6x to $1.3B in 2018 from $229M in 2013.
- Alcoa previously completed a $300M automotive expansion at its Davenport, Iowa, facility in January 2014.
Tue, Sep. 22, 9:07 AM
- Mining shares are leading a big slide in European equities as metals prices tumble on fears that an economic slowdown in China, the world’s biggest consumer of raw materials, is deepening.
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) fell to a new intraday low of 107 pence/share, down more than 9% for the worst performance on the U.K.’s FTSE 100 index; Anglo American (OTCPK:AAUKF, OTCPK:AAUKY), ArcelorMittal (NYSE:MT) and Antofagasta (OTC:ANFGF) each fall more than 6%, while BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO) rank among the 10 biggest decliners, down ~4.3% each.
- Credit Suisse cuts its earnings estimates across the mining sector, saying “Until China demand and emerging market currencies find a floor, it will remain challenging to put an absolute floor on commodity prices."
- The firm cuts its stock price targets for diversified miners including BHP, which also says it is planning to sell hybrid securities to help refinance near-term liabilities.
- Moody's says miners likely will be the hardest hit of any sector in Europe, the Middle East and Africa as a result of China’s economic slowdown.
- Also: FCX -4.5%, VALE -4.1%, X -2.8%, AA -1.7% premarket.
Thu, Sep. 17, 2:22 PM
- A U.S. aluminum industry trade group calls on federal authorities to investigate allegations that Chinese aluminum producers are improperly labeling their exports, flooding the market and driving down global prices.
- The call marks the body's strongest official condemnation yet of China's exports to the U.S.
- China's exports have angered producers such as Alcoa (NYSE:AA), whose CEO has publicly criticized "fake-semis," referring to allegations that China has mislabeled exports as semi-fabricated aluminum in order to evade an export tax on primary aluminum.
- Century Aluminum (NASDAQ:CENX) announced plans to idle its Hawesville, Ky., smelter last month, a move it blamed on "the improper export of heavily subsidized Chinese aluminum products."
AA vs. ETF Alternatives
Alcoa Inc manufactures and engineers lightweight metals. It products include aluminum, titanium, and nickel, which are used in aircraft, automobiles, commercial transportation, packaging, oil and gas, defense and industrial applications, among others.
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