Alcoa Edges Past Estimates Despite Restructuring Costs
NEW YORK (TheStreet) -Alcoa
Alcoa reported losses of 11 cents per share, losing $119 million for the quarter. Excluding restructuring and legal fees, the company earned 7 cents per share on $5.85 billion in revenue. Analysts polled by Thomson Reuters were looking for earnings of 6 cents per share on $5.83 billion in sales.
Legal battles have plagued the Dow Jones Industrial Average component for more than 5 years following allegations from the Department of Justice and the Securities and Exchange Commission of corrupt payments involving Alba. Legal fees in the past have included settlements in the hopes of resolving the conflict.
"Our businesses showed remarkable operating performance in the quarter with solid free cash flow," said Klaus Kleinfeld, Alcoa Chairman and CEO in the press release. "In our value-add businesses we reached another milestone with record profitability in our downstream business while acting decisively to defy the headwinds of falling metal prices in our upstream businesses. We improved our competitive position by actively restructuring, curtailing, and closing facilities and made progress addressing legacy legal issues."
Alcoa hopes to continue seeing growth through 2013. Alcoa predicts a 7% increase in aluminum demand this year, as well as 9-10% from the aerospace community, 1-4% from the automotive industry, and 3-8% from commercial transportation.
Alcoa announced plans to expand production and facilities. Construction on the $90 million aluminum-lithium production facility in Lafayette, Indiana continues to progress as the company expands its UK Kitt Green facility and the Alcoa Technical Center outside of Pittsburg. The company also plans to spend $275 million over the next three years in the United States to expand the Alcoa, TN rolling mill to match demands by the automotive industry.
Shares closed the regular session higher, gaining 1.41% to finish at $7.92. The stock was little changed in after-hours trading, off 0.13% to 7.91 according to Nasdaq.com.
-- Written by Robert Arenella in New York
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