Alcoa Reveals 4Q EPS Miss, Revenue Beat

By Earnings FOXBusiness

Alcoa (AA) logged a fourth-quarter loss and worse-than-expected adjusted earnings on Thursday even as the aluminum maker’s revenue exceeded forecasts.

Continue Reading Below

Shares of Pittsburgh-based Alcoa retreated 3% on the mixed quarterly results, which were hurt by $1.7 billion in goodwill impairment charges tied to previous acquisitions.

Alcoa’s quarterly report used to mark the unofficial start of earnings season, but in September the company was replaced as a member of the Dow Industrials by Nike (NKE).

The company said it lost $2.34 billion, or $2.19 a share, last quarter, compared with a profit of $242 million, or 21 cents a share, a year earlier. Alcoa reported $1.7 billion in non-cash goodwill impairment related to legacy smelting acquisitions.

Excluding one-time items, the company said it earned 4 cents a share, trailing consensus calls from analysts for 6 cents.

More On This...

Revenue fell 5% to $5.6 billion, topping the Street’s view of $5.34 billion, despite a 7% drop in realized aluminum prices.

Continue Reading Below

"We delivered strong operating performance in the fourth quarter, led by record downstream profitability, as our strategy to build-out the value-add businesses and lower the cost base in the commodity segment gains traction," Alcoa CEO Klaus Kleinfeld said in a statement.

Looking ahead, Alcoa projected global aluminum demand growth of 7% in 2014, matching 2013’s expansion. 

The company sees growth of 7% to 8% in aerospace aluminum demand, 1% to 4% in autos and 2% to 3% in packaging. On the other hand, transportation demand is seen ranging between -1% and 3%, while industrial gas turbine market is expected to suffer an 8% to 12% drop in demand.

In an effort to improve its balance sheet, Alcoa reported $1.4 billion of cash on hand and its lowest year-end net debt since December 2006.

Alcoa's shares fell 2.9% to $10.38 in extended trading on Thursday afternoon. Alcoa had been up 15% over the past 12 months and 31% over the past three months.

Earlier on Thursday, Alcoa settled federal charges of bribing government officials in Bahrain with U.S. authorities for $384 million. As part of the deal, Alcoa pleaded guilty to one count of violating anti-bribery provisions of the Foreign Corrupt Practices Act. The penalties were within the range previously disclosed by the company.

What do you think?

Click the button below to comment on this article.