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Alcoa Inc. Reports Operating Results (10-Q)

October 25, 2012 | About:
10qk

10qk

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Alcoa Inc. (AA) filed Quarterly Report for the period ended 2012-09-30.

Alcoa Inc. has a market cap of $9.63 billion; its shares were traded at around $8.72 with a P/E ratio of 56.3 and P/S ratio of 0.4. The dividend yield of Alcoa Inc. stocks is 1.3%.

Highlight of Business Operations:

Net loss attributable to noncontrolling interests for the 2012 third quarter and nine-month period was $32 and $44, respectively, compared to Net income attributable to noncontrolling interests of $53 and $166 in the 2011 third quarter and nine-month period, respectively. The change in both periods was primarily due to lower earnings at Alcoa World Alumina and Chemicals (AWAC), which is owned 60% by Alcoa and 40% by Alumina Limited. The decline in earnings at AWAC was mainly driven by lower realized prices, due to a decrease in contractual LME-based pricing; higher input costs, particularly caustic; and a charge for a litigation reserve of $16 (third quarter) and $34 (nine months); somewhat offset by net productivity improvements and net favorable foreign currency movements due to a stronger U.S. dollar.

Third-party sales for the Alumina segment dropped 13% in the 2012 third quarter and 12% in the 2012 nine-month period compared with the same periods in 2011. In the 2012 third quarter, the decrease was primarily due to a 20% decline in realized prices, driven by a decrease in contractual LME-based pricing, and unfavorable foreign currency movements due to a weaker Australian dollar, slightly offset by higher demand. The drop in the 2012 nine-month period was principally the result of a 16% decline in realized prices, driven by a decrease in contractual LME-based pricing.

Intersegment sales decreased 23% and 16% in the 2012 third quarter and nine-month period, respectively, compared to the corresponding periods in 2011, mostly due to lower realized prices and decreased demand from the Primary Metals segment.

Third-party sales for the Primary Metals segment decreased 16% in the 2012 third quarter and 11% in the 2012 nine-month period compared with the same periods in 2011. The decline in both periods was mostly the result of a 17% (third quarter) and a 15% (nine months) drop in realized prices, driven by 20% (third quarter) and 19% (nine months) lower LME prices, and the previously mentioned curtailments, somewhat offset by higher buy/resell activity due to the curtailments and higher volumes, largely attributable to the previously mentioned restarted U.S. capacity.

a decrease in Noncontrolling interests, mainly due to lower earnings at AWAC, principally driven by lower realized prices, due to a decrease in contractual LME-based pricing; higher input costs, particularly caustic; and a charge for a litigation reserve ($16 in the third quarter and $34 in the nine-month period comparisons); somewhat offset by net productivity improvements and net favorable foreign currency movements due to a stronger U.S. dollar; and

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