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Released April 10, 2015 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Alcoa (NYSE:AA) (New York) reported earnings for its fiscal first quarter swung to a net profit of $195 million from a loss of $178 million loss a year earlier, with gains in three of its four business segments. The aluminum producer said revenue for the quarter ended March 31 totaled $5.8 billion, up 7% from the same quarter last year.
Industrial Info is tracking 37 active Alcoa projects worth $4.86 billion. This includes $4 billion for eight projects that in the planning phases, where factors could alter their outcome and timing. Twenty-six projects, valued at $667 million, are in various stages of construction, while three projects, valued at $137 million, are in the engineering phases.
Alcoa's $300 million expansion of the North Aluminum Sheet Plant in Alcoa, Tennessee is set for completion in mid-2015.
Excluding special items, including an after-tax charge of $168 million primarily for restructuring, Alcoa's first-quarter 2015 earnings totaled $363 million, said Chief Financial Officer William Oplinger during the company's earnings conference call. The company's earnings for the same quarter in 2014 were also heavily impacted by restructuring charges. For related information see April 11, 2014, article - Alcoa Sees Weak Prices, Restructuring Charges Offset Operational Improvement in First-Quarter 2014, and April 7, 2014, article - March Proves Pivotal for Alcoa's Business Transition Plan.
Capital expenditures for the quarter were $247 million, Oplinger said, including spending for aerospace product expansions at Alcoa's facilities in La Porte, Indiana and Davenport, Iowa, as well as the expansion in Tennessee.
Alcoa's Engineered Products and Solutions segment reported $191 million in first-quarter, after-tax operating income, up by $2 million from the same quarter in 2014. The company cited productivity improvements and higher volumes in aerospace, commercial transportation and North American non-residential construction markets. Looking to the second quarter, Oplinger said he expects the segment's income to be 3% to 8% more than the second quarter of 2014, as a result of continued growth in the aerospace market and the recovery of the North American nonresidential building market. "Heavy duty truck will remain strong in North America, partially offset by declines in Europe," he added.
The company's Global Rolled Products segment, however, reported its after-tax operating income fell to $34 million from $59 million a year earlier. Alcoa said market pressures in packaging, and falling metal prices, more than offset shipments in automotive products. Oplinger said the segment will likely see a 30% reduction in operating income in the second quarter, due to packaging prices in North America and the inability to pass through metal premiums in Russia. The ramp-up of Alcoa's Saudi Arabia rolling mill, and investments in micromill research and development will also impact the segment's earnings, he said.
The Alumina segment reported first-quarter, after-tax operating income of $221 million, up from $92 million in the year-earlier quarter. Oplinger said he expects productivity improvements, volume increases, and a favorable energy environment to offset cost increases in the second quarter.
After-tax operating income for the Primary Metals segment was $187 million in the first quarter, compared with a loss of $15 million in the same quarter of 2014. The company cited a 10% increase in third-party realized prices. Oplinger said Alcoa's pricing will continue to lag London Metal Exchange prices by 15 days, and shipments will be down by 18,000 tonnes due to the curtailment of operations at its Sao Luis facility in Brazil, However, "In sum, we expect productivity and favorable energy to offset the lower volume and other cost increases in the segment" during the second quarter, he said.
"We continue to project approximately 3.5 million metric tons of new demand in 2015, resulting in a 6.5% growth rate, and leading to record global demand of 57.5 million metric tons," Oplinger said.
"In the alumina market, we tightened our forecast by roughly 230,000 metric tons, driven by slower than expected ramp-up in supply," he continued. "And regarding aluminum, where the market is relatively balanced with a slight surplus of 326,000 metric tons, China continues to add capacity, with expansions occurring largely in the northwest."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
Industrial Info is tracking 37 active Alcoa projects worth $4.86 billion. This includes $4 billion for eight projects that in the planning phases, where factors could alter their outcome and timing. Twenty-six projects, valued at $667 million, are in various stages of construction, while three projects, valued at $137 million, are in the engineering phases.
Alcoa's $300 million expansion of the North Aluminum Sheet Plant in Alcoa, Tennessee is set for completion in mid-2015.
Excluding special items, including an after-tax charge of $168 million primarily for restructuring, Alcoa's first-quarter 2015 earnings totaled $363 million, said Chief Financial Officer William Oplinger during the company's earnings conference call. The company's earnings for the same quarter in 2014 were also heavily impacted by restructuring charges. For related information see April 11, 2014, article - Alcoa Sees Weak Prices, Restructuring Charges Offset Operational Improvement in First-Quarter 2014, and April 7, 2014, article - March Proves Pivotal for Alcoa's Business Transition Plan.
Capital expenditures for the quarter were $247 million, Oplinger said, including spending for aerospace product expansions at Alcoa's facilities in La Porte, Indiana and Davenport, Iowa, as well as the expansion in Tennessee.
Alcoa's Engineered Products and Solutions segment reported $191 million in first-quarter, after-tax operating income, up by $2 million from the same quarter in 2014. The company cited productivity improvements and higher volumes in aerospace, commercial transportation and North American non-residential construction markets. Looking to the second quarter, Oplinger said he expects the segment's income to be 3% to 8% more than the second quarter of 2014, as a result of continued growth in the aerospace market and the recovery of the North American nonresidential building market. "Heavy duty truck will remain strong in North America, partially offset by declines in Europe," he added.
The company's Global Rolled Products segment, however, reported its after-tax operating income fell to $34 million from $59 million a year earlier. Alcoa said market pressures in packaging, and falling metal prices, more than offset shipments in automotive products. Oplinger said the segment will likely see a 30% reduction in operating income in the second quarter, due to packaging prices in North America and the inability to pass through metal premiums in Russia. The ramp-up of Alcoa's Saudi Arabia rolling mill, and investments in micromill research and development will also impact the segment's earnings, he said.
The Alumina segment reported first-quarter, after-tax operating income of $221 million, up from $92 million in the year-earlier quarter. Oplinger said he expects productivity improvements, volume increases, and a favorable energy environment to offset cost increases in the second quarter.
After-tax operating income for the Primary Metals segment was $187 million in the first quarter, compared with a loss of $15 million in the same quarter of 2014. The company cited a 10% increase in third-party realized prices. Oplinger said Alcoa's pricing will continue to lag London Metal Exchange prices by 15 days, and shipments will be down by 18,000 tonnes due to the curtailment of operations at its Sao Luis facility in Brazil, However, "In sum, we expect productivity and favorable energy to offset the lower volume and other cost increases in the segment" during the second quarter, he said.
"We continue to project approximately 3.5 million metric tons of new demand in 2015, resulting in a 6.5% growth rate, and leading to record global demand of 57.5 million metric tons," Oplinger said.
"In the alumina market, we tightened our forecast by roughly 230,000 metric tons, driven by slower than expected ramp-up in supply," he continued. "And regarding aluminum, where the market is relatively balanced with a slight surplus of 326,000 metric tons, China continues to add capacity, with expansions occurring largely in the northwest."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
