Alcoa Inc. (NYSE : AA)
Alcoa Inc. (AA), a company that produces and manages aluminum yesterday announced their Fiscal 2015 fourth quarter and full year financial results. Alcoa reported an adjusted earnings per share of $0.04 which beat analyst estimates of $0.02 per share. Alcoa reported revenues of $5.25 billion which missed analyst expectations of $5.29 billion and is down 18% year-over-year (YOY). Following the mixed earnings numbers Alcoa stock is down over 9% as of late afternoon trading on Tuesday.
Alcoa Inc. CEO’s Comments
“2015 was a pivotal year for Alcoa,” said Klaus Kleinfeld, Alcoa Chairman and Chief Executive Officer. “We substantially strengthened our aerospace offerings through innovations and acquisitions and our customers responded favorably, awarding us $9 billion in aerospace contracts; and we continued to ramp up our automotive business and shift the midstream to a higher-margin product mix. In the Upstream, we faced harsh headwinds with prices for alumina down 43 percent and aluminum down 28 percent. As a result of our closures, curtailments, productivity actions and new business structure we improved competitiveness and strengthened the portfolio. We are fully on track to launch two strong, standalone companies in the second half of 2016.” Turning to the current quarter, Kleinfeld continued, “Our solid fourth quarter results reflect our active portfolio management. Aerospace momentum accelerated with record sales and a $4 billion string of major contract wins. In the midstream, adjusted EBITDA per metric ton grew 19 percent as our shift to higher value products like automotive paid off. A new $650 million Value-Add business improvement program will further sharpen our profitability edge. In the Upstream, alumina prices dropped a further 24 percent and aluminum prices stayed stubbornly low. We took aggressive actions: closed and curtailed more unprofitable capacity, accelerated productivity and weathered the storm with Upstream remaining profitable. To further boost resilience we launched a $600 million Upstream business improvement program. We ended the year in an excellent cash position, with all businesses delivering strong productivity.” Business Wire
AA Technical Analysis
AA opened at $8.01, up from the prior day’s close of $8.00. As of late afternoon trading on Tuesday AA stock is down 10% to $7.21 on mixed earnings news. Taking a look at the daily chart we can see that AA has been on an overall decline in price all year dating back to its 52 week high price of $17.10 reached on February 15th, 2015. Right now AA is sitting right at its 52 week low price of $7.10 which was reached yesterday. Only two week ago on December 30th AA was trading at $10.03, equivalent to a 28% drop in price. AA has a float of 1.31 billion shares and is trading almost 3 times the normal daily trading volume. I believe the move down in AA was a little of an over reaction as earnings per share numbers were ahead of analyst expectations and I would be looking for a buying opportunity if the move down continues. For trading purposes, I would like to see the stock close above $7.00 and use that as a buy and support level moving forward.
Alcoa Inc. produces and manages primary aluminum, fabricated aluminum, and alumina worldwide. The company operates through four segments: Alumina, Primary Metals, Global Rolled Products, and Engineered Products and Solutions. The Alumina segment is involved in mining bauxite, which is then refined into alumina. The Primary Metals segment produces primary aluminum. The Global Rolled Products segment produces and sells aluminum plates, sheets, and foils, as well as rigid container sheets for food and beverage packaging markets. The Engineered Products and Solutions segment offers titanium, super alloy investment, and aluminum castings; fasteners; aluminum wheels; integrated aluminum structural systems; architectural extrusions; and forgings and hard alloy extrusions. The companys products are primarily used in the transportation, including aerospace, automotive, truck, trailer, rail, and shipping; packaging; building and construction; oil and gas; defense; consumer electronics; brazing; power generation; and industrial applications. Alcoa Inc. was founded in 1888 and is based in New York, New York. Yahoo Finance