Alcoa's Q2 profit drops nearly 4 pc
Aluminum maker Alcoa Inc usasaid second-quarter profit slipped nearly 4 per cent as outage costs at two smelters weighed down results.
By Agencies |
PITTSBURGH: Aluminum maker Alcoa Inc usasaid second-quarter profit slipped nearly 4 per cent as outage costs at two smelters weighed down results.
Net income for the three months ended June 30 fell to $715 million (euro524.92 million), or 81 cents per share, from $744 million (euro546.22 million), or 85 cents per share, for the same period last year, the Pittsburgh-based company said in a statement Monday.
Alcoa, the first of the Dow Jones Industrials to report earnings this quarter, booked $36 million (euro26.43 million), or 4 cents per share, for curtailment costs at its facilities in Alcoa, Tennessee, and Rockdale, Texas.
A production line at the Tennessee aluminum smelter, knocked out by a lighting strike in April, was restarted last month. The Rockdale smelter's output was reduced for refurbishment expected to be completed in the fourth quarter.
The results also included a restructuring gain of $21 million (euro15.42 million), or 2 cents per share, mainly from the completion of a joint venture with Sweden's Sapa Group. Alcoa will contribute 22 soft-alloy extrusion facilities in eight countries to the joint venture. Soft-alloy extrusions are alloy profiles used in industries such as construction and car making.
That gain was offset by a 2 cent-per-share charge linked to Alcoa's outstanding $27.5 billion (euro20.19 billion) bid for Canadian rival Alcan Inc. On Monday, Alcoa extended the offer's expiration from Tuesday to Aug. 10, subject to further extension.
Alain J P Belda, Alcoa's chairman and chief executive, said he has met with many shareholders since Alcoa launched its hostile cash-and-stock bid for its Montreal-based competitor May 7.
Alcan turned down Alcoa's offer as inadequate and reportedly has been talking with other potential suitors. Alcan has said it would consider a sweetened offer or perhaps turn the tables and try to buy Alcoa.
``We remain the natural partner for Alcan, with the most substantial synergies and an unparalleled commitment to Canada and Quebec,'' he said in a statement.
Federal antitrust authorities have sought more information from Alcoa about the takeover bid, announced after two years of private talks failed to yield a negotiated deal. Alcan has said Alcoa underestimated potential regulatory problems.
Quarterly revenue rose to a record $8.1 billion (euro5.95 billion), up 3.8 percent from $7.8 billion (euro5.73 billion) during the year-ago period. The company attributed the growth to higher volumes and improved product mix.
The earnings matched Wall Street expectations. Analysts polled by Thomson Financial had forecast profit of 81 cents per share on slightly higher sales of $8.3 billion (euro6.09 billion). Alcoa said its revenue figure excluded the soft-alloy joint venture and otherwise would have met analyst projections.
Charles Bradford, an analyst with Bradford Research/Soliel Securities in New York, said he thought Alcoa did reasonably well in the quarter, considering the metal price was down and foreign currency charges were high.
He noted the second quarter was Alcoa's best seasonally and that the company had indicated some of its businesses may weaken in the third quarter.
Belda said the company expects global industry growth of 10 per cent for 2007, with China remaining the primary driver.
For the first half of the year, earnings edged up 2.2 per cent to $1.38 billion (euro1.01 billion), up from $1.35 billion (euro990 million) last year.
Alcoa shares rose 70 cents to $42.36, near the upper end of their 52-week range of $26.39 to $42.90.
Net income for the three months ended June 30 fell to $715 million (euro524.92 million), or 81 cents per share, from $744 million (euro546.22 million), or 85 cents per share, for the same period last year, the Pittsburgh-based company said in a statement Monday.
Alcoa, the first of the Dow Jones Industrials to report earnings this quarter, booked $36 million (euro26.43 million), or 4 cents per share, for curtailment costs at its facilities in Alcoa, Tennessee, and Rockdale, Texas.
A production line at the Tennessee aluminum smelter, knocked out by a lighting strike in April, was restarted last month. The Rockdale smelter's output was reduced for refurbishment expected to be completed in the fourth quarter.
The results also included a restructuring gain of $21 million (euro15.42 million), or 2 cents per share, mainly from the completion of a joint venture with Sweden's Sapa Group. Alcoa will contribute 22 soft-alloy extrusion facilities in eight countries to the joint venture. Soft-alloy extrusions are alloy profiles used in industries such as construction and car making.
That gain was offset by a 2 cent-per-share charge linked to Alcoa's outstanding $27.5 billion (euro20.19 billion) bid for Canadian rival Alcan Inc. On Monday, Alcoa extended the offer's expiration from Tuesday to Aug. 10, subject to further extension.
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Alain J P Belda, Alcoa's chairman and chief executive, said he has met with many shareholders since Alcoa launched its hostile cash-and-stock bid for its Montreal-based competitor May 7.
Alcan turned down Alcoa's offer as inadequate and reportedly has been talking with other potential suitors. Alcan has said it would consider a sweetened offer or perhaps turn the tables and try to buy Alcoa.
``We remain the natural partner for Alcan, with the most substantial synergies and an unparalleled commitment to Canada and Quebec,'' he said in a statement.
Federal antitrust authorities have sought more information from Alcoa about the takeover bid, announced after two years of private talks failed to yield a negotiated deal. Alcan has said Alcoa underestimated potential regulatory problems.
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Quarterly revenue rose to a record $8.1 billion (euro5.95 billion), up 3.8 percent from $7.8 billion (euro5.73 billion) during the year-ago period. The company attributed the growth to higher volumes and improved product mix.
The earnings matched Wall Street expectations. Analysts polled by Thomson Financial had forecast profit of 81 cents per share on slightly higher sales of $8.3 billion (euro6.09 billion). Alcoa said its revenue figure excluded the soft-alloy joint venture and otherwise would have met analyst projections.
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Charles Bradford, an analyst with Bradford Research/Soliel Securities in New York, said he thought Alcoa did reasonably well in the quarter, considering the metal price was down and foreign currency charges were high.
He noted the second quarter was Alcoa's best seasonally and that the company had indicated some of its businesses may weaken in the third quarter.
Belda said the company expects global industry growth of 10 per cent for 2007, with China remaining the primary driver.
For the first half of the year, earnings edged up 2.2 per cent to $1.38 billion (euro1.01 billion), up from $1.35 billion (euro990 million) last year.
Alcoa shares rose 70 cents to $42.36, near the upper end of their 52-week range of $26.39 to $42.90.
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