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Last Update: 09-Apr-13 07:43 ET
Alcoa shares fall 1% following miss on revenues
Alcoa (AA $8.25 -0.14) reported first quarter earnings of $0.11 per share, excluding non-recurring items, $0.03 better than the Capital IQ consensus Estimate of $0.08, while revenues fell 2.9% year/year to $5.83 billion versus the $5.89 bln consensus. Alcoa reaffirmed 2013 aluminum demand growth of 7%. This was a strong quarter led by record profitability in our downstream business, improved results in our midstream business, and remarkable upstream performance in the face of weak metal prices. Our mid and downstream businesses now account for 72% of our total after-tax operating income while our upstream business continues to move down the cost curve." Continued Growth Across End Markets Alcoa continues to project 7% global aluminum demand growth in 2013 and essentially balanced alumina and aluminum markets. However, the co sees a slightly tighter market as supply contracts. Co reduced its surplus projection for aluminum from 535,000 metric tons in Q4 to 155,000 metric tons this quarter, driven by curtailments. Alcoa projects global growth this year across the aerospace (9-10%), automotive (1-4%). Alba Update Alcoa continues to actively negotiate with the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) to reach a resolution of their investigations of the Alba matter; however, we have not reached any agreement with either agency. Given the uncertainty regarding whether a settlement can be reached and, if reached, on what terms, we are not able to estimate a range of reasonably possible loss with regard to any such settlement. If a settlement of the government investigations is reached, we believe that the settlement amount would be material to Alcoa's results of operations for the relevant fiscal period. If a settlement cannot be reached, Alcoa will proceed to trial with the DOJ and the SEC and under those circumstances is unable to predict an outcome or to estimate its reasonably possible loss. There can be no assurance that the final outcome of the government's investigations will not have a material adverse effect on Alcoa.
