Historical Stock Chart
2 Months : From Oct 2019 to Dec 2019
By Micah Maidenberg
Alcoa Corp. plans to sell up to $1 billion in assets and may close facilities over the next few years as it grapples with slowing economic growth that has driven aluminum prices lower, damaging its financial performance.
The Pittsburgh-based manufacturer said Wednesday it has launched a review of the company meant to cut expenses and point it toward sustainable profits. The company said it would try to sell what it called noncore assets over the next year to 18 months, bringing in between $500 million and $1 billion in proceeds.
Shares of Alcoa rose 6% in after-hours trading but have fallen 28% so far this year through Wednesday.
Over a five-year period, Alcoa plans to consider a range of further asset sales and closures of facilities, as well as curtailing production at other sites. It said it would review 1.5 million metric tons of smelting capacity and 4 million metric tons of alumina-refining capacity
The company has been hurt by fears that a weaker global economy will cut into demand for its products and crimp prices for metals. On Tuesday, the International Monetary Fund said it expects growth of 3% this year, lower than its forecast from July and off close to 1 percentage point compared with 2017.
Global demand for aluminum in 2019 will be weaker than Alcoa previously expected, the company also said Wednesday, contracting between 0.4% and 0.6%. Earlier, it said it believed demand for the metal would rise up to 2.3% this year.
"The change is driven by weakening macroeconomic conditions, trade tensions between the U.S. and China, and contracting manufacturing activity, especially in the global automotive sector," the company said in a statement.
Quarterly revenue at Alcoa fell 24% from a year earlier to $2.57 billion as aluminum prices declined. Its average selling price of $2,138 a metric ton for aluminum in the latest quarter was down 13% compared with the year-ago period.
Alcoa reported a quarterly loss of $221 million, or $1.19 a share, wider than the loss of $6 million, or 3 cents a share, recorded in the year-ago period. After adjustments, the company reported a loss of 44 cents a share, worse than what analysts polled by FactSet expected.
(END) Dow Jones Newswires
October 16, 2019 17:29 ET (21:29 GMT)
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