Alcoa posts loss because of old acquisitions

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Alcoa on Thursday reported more than $2 billion in losses for the fourth quarter and all of 2013. Most of the red ink was generated by a decision to write down the value of smelters acquired in the 1998 acquisition of Alumax and the 2000 purchase of Reynolds Metals.

The company reported a fourth-quarter loss of $2.34 billion, or $2.19 per share vs. earnings of $242 million, or 21 cents per share, in the year-ago quarter. Sales fell 5 percent to $5.59 billion, while average aluminum prices slid 7 percent from year-ago levels.

Excluding the asset writedown and other one-time items, the aluminum producer said it earned $40 million, or 4 cents per share, during the quarter.

Analysts surveyed by Bloomberg forecast adjusted earnings of 6 cents per share on sales of $5.3 billion.

The non-cash charge for writing down the value of plants acquired during the acquisitions came to $1.7 billion. Other one-time items included a $361 million non-cash charge related to potential tax benefits that the company said it is unlikely to realize and $243 million related to the $384 million Alcoa agreed to pay today to settle criminal and civil charges brought by the U.S. Justice Department and the Securities and Exchange Commission.

A joint venture that Alcoa owns a majority stake in agreed to plead guilty to one count of violating the Foreign Corrupt Practices Act as part of the settlement. The charge stemmed from bribes the Australian-based joint venture paid through a middleman in order to win business with Bahrain’s government-owned aluminum producer.

For all of 2013, Alcoa lost $2.29 billion, or $2.14 per share, vs. 2012 profits of $191 million, or 18 cents per share. Sales fell 3 percent to $23.03 billion.

The results were disclosed after Wall Street closed. Alcoa shares finished Thursday at $10.69, down 14 cents. The shares rose 22 percent last year.

Len Boselovic: or 412-263-1941. First Published January 9, 2014 4:49 PM

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