Still trying to restructure, Alcoa takes a tumble in 2015
January 11, 2016 5:14 PM
Gene J. Puskar/Associated Press
For all of 2015, Alcoa lost $121 million, or 15 cents per share, vs. 2014 earnings of $268 million, or 21 cents per share.
By Len Boselovic / Pittsburgh Post-Gazette
Alcoa today reported losses for the fourth quarter and all of 2015, citing falling aluminum prices and restructuring charges related to streamlining capacity. Fourth quarter earnings beat analyst estimates but sales fell shy.
The specialty metals producer said it lost $500 million, or 39 cents per share, in the fourth quarter vs. net income of $159 million, or 11 cents per share in the year-ago quarter. Sales fell 18 percent to $5.2 billion.
Excluding $565 million in charges related to closing or curtailing capacity at its alumina and aluminum plants and tax items, Alcoa said adjusted fourth quarter earnings totaled $65 million, or 4 cents per share.
Analysts had expected adjusted fourth quarter earnings of 2 cents per share on sales of $5.3 billion.
For all of 2015, Alcoa lost $121 million, or 15 cents per share, vs. 2014 earnings of $268 million, or 21 cents per share. Sales fell 6 percent to $22.5 billion.
The results tell the tale of two companies, the upstream aluminum producing business weighed down by falling commodity prices and the more profitable downstream business which supplies aluminum, titanium, and other high value metals to the aerospace, automotive, and other industries. Alcoa announced plans in September to split those two businesses into separate companies, a move it expects to complete in the second half of this year.
Alcoa is taking measures to restructure the upstream business. Last year, it announced it was idling or closing 25 percent of its aluminum smelting capacity and 20 percent of its alumina production. Last week, the company said it will permanently close its Evansville, Ind., smelter and reduce alumina production by another 1 million tons, including curtailing the remaining capacity at its Point Comfort, Texas, alumina refinery.
In a statement, the company said its downstream business secured about $9 billion in aerospace contracts last year, more than double 2014 levels. Today, Alcoa disclosed it has a long-term contract to sell jet engine components to GE Aviation. The specialty metals producer said the contract is valued at more than $1.5 billion over the life of the agreement.
The results were disclosed after Wall Street closed. Alcoa shares finished today at $8, off 7 cents.
Len Boselovic: firstname.lastname@example.org or 412-263-1941.
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