Category Archives: Alcoa Inc.

Aluminum maker Alcoa battered by tough week

Alcoa Inc. Location Manager Ken McMillen, left, Sen. Lamar Alexander, Alcoa CEO Klaus Kleinfeld, U.S. Rep. John J. Duncan Jr., and Gov. Bill Haslam arrive for a groundbreaking for a $275 million expansion of the Alcoa Inc. rolling mill to produce automotive sheet aluminum on Thursday, Aug. 29, 2013, in Alcoa.  (Paul Efird/News Sentinel)

Alcoa Inc. Location Manager Ken McMillen, left, Sen. Lamar Alexander, Alcoa CEO Klaus Kleinfeld, U.S. Rep. John J. Duncan Jr., and Gov. Bill Haslam arrive for a groundbreaking for a $275 million expansion of the Alcoa Inc. rolling mill to produce automotive sheet aluminum on Thursday, Aug. 29, 2013, in Alcoa. (Paul Efird/News Sentinel)

The news hasn’t been good this week for aluminum manufacturer Alcoa Inc.
It’s stock price is tumbling, a Duetsche Bank analyst downgraded the stock to sell and forecasters were predicting aluminum prices would fall 12 percent or more over the next two years.
All this on the heels of Alcoa being booted last month from the Dow Jones Industrial Average.
The future of Alcoa, which recently announced plans for a $275 million expansion of its Blount County manufacturing operation, will have a significant impact on the East Tennessee economy. The company is investing in a plant upgrade in a move to take advantage of rising demand for aluminum by auto makers.
Alcoa will kickoff earnings season with the release of its quarterly financial report on Tuesday.
Given recent headlines it will be interesting to see how the company performed last quarter and its outlook for the near future.
Deutsche Bank analyst Jorge Beristain told Forbes the company should spin-off its primary metals business to ease its cash-flow problems.
Click the headlines below for more details:
CNNMoney: Alcoa CEO on debt ceiling
Motley Fool: Why Alcoa doesn’t seem so shiny
Forbes: Alcoa’s $1.2 Billion Drag: Analyst Makes Case For Breakup

Alcoa says being dumped by DJIA no big deal

Alcoa Inc. Location Manager Ken McMillen, left, Sen. Lamar Alexander, Alcoa CEO Klaus Kleinfeld, U.S. Rep. John J. Duncan Jr., and Gov. Bill Haslam arrive for a groundbreaking for a $275 million expansion of the Alcoa Inc. rolling mill to produce automotive sheet aluminum on Thursday, Aug. 29, 2013, in Alcoa.  (Paul Efird/News Sentinel)

Alcoa Inc. Location Manager Ken McMillen, left, Sen. Lamar Alexander, Alcoa CEO Klaus Kleinfeld, U.S. Rep. John J. Duncan Jr., and Gov. Bill Haslam arrive for a groundbreaking for a $275 million expansion of the Alcoa Inc. rolling mill to produce automotive sheet aluminum on Thursday, Aug. 29, 2013, in Alcoa. (Paul Efird/News Sentinel)

After being booted from the Dow Jones Industrial Average earlier today, aluminum company Alcoa Inc. rushed to assure shareholders the decision was no big deal.
“The composition of the Dow Jones Industrial Average has no impact on Alcoa’s ability to successfully execute our strategy, and we remain focused on delivering shareholder value. We continue to grow our value-add businesses and capture growth opportunities in end markets like aerospace and automotive,” Alcoa said in a statement.
Alcoa, a long time component of the DJIA, has a major manufacturing operation in Blount County. The company recently announced a $275 million expansion of the Blount County plant aimed at producing aluminum for auto manufacturers.
Although the DJIA is generally considered an index of the top U.S. companies, only 30 companies are used to calculate the index. Alcoa remains on the S&P 500, which is a much broader gauge of the market.
Bank of America, and Hewlett-Packard also were removed from the DJIA.
Added to the DJIA were Goldman Sachs, Visa and Nike.
The changes take effect Sept. 23.
Click here for Alcoa’s full statement.

Moody’s puts Alcoa ratings on review

UPDATE: Alcoa issued a statement saying it is committed to its investment grade rating and is “in a stronger financial position than four years ago.” The company’s full statement is copied below.

Alcoa Inc. shares were down nearly 3 percent in morning trading today after Moody’s Investors

ALCOA

ALCOA

Service on Tuesday put the aluminum company on review for a downgrade.

Moody’s cited a nearly 22 percent drop in aluminum prices, according to an Associated Press report.

Alcoa has a manufacturing operation in Blount County that produces aluminum for beverage cans.

 

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Alcoa completes $600M Tapoco deal

 

Aluminum company Alcoa said Thursday it has completed the sale of its 378-megawatt Tapoco Hydroelectric Project to Brookfield Renewable Energy Partners.

Tapoco includes four hydroelectric power generating stations and dams on the Little Tennessee and Cheoah rivers in East Tennessee and western North Carolina.

The $600 million deal also includes 86 miles of transmission line and about 14,500 acres of land surrounding the hydroelectric project, Alcoa said in a news release.

 

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Analysts expect reduced Alcoa earnings

Analysts are expecting aluminum giant Alcoa Inc. to report reduced earnings next week when it kicks off the second quarter earnings season.

Earnings estimates have dropped in the last few weeks to 6-7 cents per share, down from about early predicitions in the 12 cents range, according to a published reports.

However, many analysts continue to have a positive long-term outlook on Alcoa, a major player in the the Knoxville region manufacturing sector

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Analysts miss on Alcoa, what else do they have wrong?

Alcoa Inc. wasn’t supposed to have a good first quarter — not according to the experts.

But the aluminium giant fooled the analysts and opened earnings season with a surprise when it reported a first quarter profit of 9 cents a share. That’s a clear rebound from a loss of 18 cents a share in the fourth quarter last year.

If the experts can miss so badly on Alcoa, what else do the analysts have wrong?

Alcoa, which has a major manufacturing operation in Blount County with more than 1,200 employees, was supposed to be struggling with a weak economy. Maybe the economy is doing better than the experts believe.

Earnings season is just starting, but today at least investors are in a happier mood. The market as a whole is rebounding from the April slide and Alcoa shares are rising.

Big pay day for Alcoa exec despite pay cut

The second half of 2011 wasn’t kind to Alcoa Inc.’s stock price and Chairman and CEO Klaus Kleinfeld paid the price.

032610alcoa9_mc12884.JPGBecause his base pay is performance based, the aluminum company slashed Kleinfeld’s annual salary 45 percent to a relatively paltry $1.5 million when the stock slumped.

Don’t shed too many tears for Kleinfeld, though. His total compensation for the year was more than $14 million, Reuters reported. That includes salary, stock options, pension and other goodies.

I want that kind of job — take a 45 percent pay cut and still bank millions.

Reuters: Alcoa CEO’s awards cut on poor stock performance

Photo: Klaus Kleinfeld

Analysts look for clues in Alcoa cutback

Alcoa Inc.’s announcement that it would cut global smelting capacity 12 percent in response to falling aluminum prices is being sliced and diced today as analysts debate what to expect when Alcoa releases its quarterly earnings report on Monday.

Company shares were down more than 2 percent in late morning trading

Reuters quotes analyst Tony Rizzuto, of Dahlman Rose & Co., who sees the smelting reduction “as positive for Alcoa and the industry as it could lead to a more balanced supply/demand environment and provide some stability to aluminum pricing.”

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Alcoa: A dog stock or a top pick?

Sorting through the mountains of free investment advice on the web is enough to drive me crazy. That’s a short drive, but do the so-called experts really know what they’re talking about?

In today’s online check of companies with a local connection, I learned this about aluminum giant Alcoa Inc. – it was one of the dog stocks of 2011 and it’s a top pick for 2012.

Can they both be right? Maybe so, but you know what they say about free advice.

 

Alcoa Inc. getting ready for rebound

Just back from vacation and still catching up on local company news, but a Forbes story on Alcoa Inc.’s recent reorganization of its midstream businesses caught my eye.

“Aluminum demand is on the rise, primarily driven by the increased usage in the automotive and aerospace industries globally as manufacturers push to make lighter, more fuel efficient vehicles. Aluminum is also witnessing huge demand from its usage in electronics and household items,” Forbes says.

Despite the still sluggish recovery,  Alcoa apparently sees good times coming and it wants to be ready when the economy rebounds. In any event, the announcement has me wondering what impact — if any– the reorganization will have on the company’s Blount County operation.

Forbes: Emerging Markets Pushing Alcoa Stock Price From Hamilton to Jackson

Alcoa news release: Alcoa Reorganizes Midstream Businesses Around Five Key Markets to Accelerate Growth