| Alcoa Earnings: Alcoa posts smaller loss thanks to better prices, lower costs |
| Monday, January 11, 2010 |
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SAN FRANCISCO (MarketWatch) -- Alcoa Inc., aided by improving aluminum prices and lower corporate costs, reported a smaller fourth-quarter loss Monday afternoon.
Net loss was $277 million, or 28 cents a share. In the year-earlier quarter, Alcoa lost $1.2 billion or $1.49 a share, when aluminum prices and demand collapsed.
News Hub: Mixed Results From Alcoa
Aluminum producer Alcoa kicks off the fourth-quarter 2009 earnings season with a $277 million loss. WSJ's Paul Glader and Grainne McCarthy join Simon Constable on the News Hub to discuss.
Sales fell 4% to $5.4 billion. Excluding charges, Alcoa said it earned 1 cent a share.
Analysts had forecast Alcoa /quotes/comstock/13*!aa/quotes/nls/aa (AA 16.51, -0.94, -5.39%) to earn 5 cents a share on sales of $4.9 billion, according to FactSet Research.
Alcoa shares fell 4% in late trades.
Alcoa, which has lost more than $2 billion over the past year, said it generated positive, free cash flow for the first time since June 2008. Free cash flow, or money left over after all the expenses are paid, was up $947 million from the third quarter.
When the global economy collapsed, the Pittsburgh-based company closed plants, slashed its dividend and curbed its output. Since 2008, the company has cut 21,500 jobs and cut capital spending by 52% to $1.6 billion.
"They are still trying to rein in costs," said Brian Hicks, portfolio manager at U.S. Global Investors' Resources Fund, which owns Alcoa shares.
Alcoa has been working through a glut of excess metal it sells to automotive, construction and aerospace industries. In a conference call to discuss the earnings, Alcoa Chief Executive Klaus Kleinfeld said the aluminum market "is in a modest surplus."
Sales have now ticked higher in each of the past three quarters. But they haven't topped 2008's fourth quarter of $5.7 billion. Rising aluminum prices are helping Alcoa. Prices rose 9.5% from the third quarter to the fourth quarter, according to Citigroup research.
"Markets continue to be very weak relative to last year," Alcoa Chief Financial Officer Chuck McLane said in the conference call. Compared with the year-ago quarter, sales to aerospace makers fell 21%, while sales to auto makers dropped 43%. Primary metal sales tumbled 35%.
For 2010, Alcoa pegged global aluminum consumption to grow 10%, compared with a 6% decline in 2009.
Investors have been anticipating a rebound at Alcoa, a Dow component. The shares have surged 32% in the past month, outpacing the 3% gain for the blue-chip index. The stock closed Monday up 2.5% to $17.45.
The consensus stock-price target of analysts is $16.49, who on average rate Alcoa shares a "hold," according to the latest FactSet survey.
Steel and materials-related stocks have rallied early in 2010.
U.S. Steel Corp. /quotes/comstock/13*!x/quotes/nls/x (X 62.50, -0.43, -0.68%) and Titanium Metals Corp. /quotes/comstock/13*!tie/quotes/nls/tie (TIE 14.28, -0.38, -2.59%) are both up 15%. Allegheny Technologies is 12% higher.
http://www.marketwatch.com/story/alcoa-posts-smaller-loss-2010-01-11Labels: bussines |
posted by Surono Karti @ 10:12 PM  |
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