Alcoa Incurs Loss, but Predicts Improved Demand
January 15 2020 - 6:34PM
Dow Jones News
By Micah Maidenberg
Alcoa Corp. posted a fourth-quarter loss as sales fell 27%, but
the aluminum maker expects demand for the metal to pick up this
year.
The company also said Wednesday that global demand for aluminum
is likely to rise in a range of 1.4% to 2.4% this year. That would
be an improvement compared with last year, when Alcoa believes
demand slipped.
With exposure to automotive manufacturers, makers of food cans
and a host of other manufacturers, Alcoa is considered a
bellwether. The company struggled in 2019 amid trade battles,
weaker industrial activity in some markets and an expected slowdown
in overall global economic growth.
The International Monetary Fund said in October that it expects
the global economy to expand 3.4% this year, up from a predicted 3%
gain for last year. On Wednesday, officials from the U.S. and China
signed the first phase of a trade deal that is meant to ease
trade-related strains between the countries.
Alcoa reported a loss attributable to the company of $303
million, or $1.63 a share, for the fourth quarter, compared with a
profit of $51 million, or 27 cents a share, a year earlier. The
company has now posted losses in five out of the past six quarters,
according to FactSet.
Its adjusted loss of 31 cents a share was 10 cents a share worse
than analysts had predicted.
Sales also missed analysts' forecasts, dropping to $2.44 billion
as lower prices for aluminum and alumina weighed on results.
Producers refine an oxide from bauxite to create alumina, which is
turned into aluminum metal at smelters.
Realized prices for aluminum fell 13% year-over-year, while
those for alumina fell 39%.
Shares in Alcoa were lower in after-hours trading.
In October, the company said it planned to sell as much as $1
billion in assets and would consider closing facilities to cut
costs and move toward profitable growth.
Alcoa said earlier this month it would sell a waste-treatment
facility in Arkansas to Veolia ES Technical Solutions for as much
as $250 million. In December, it said it would permanently close an
alumina refinery in Texas.
(END) Dow Jones Newswires
January 15, 2020 18:19 ET (23:19 GMT)
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