Alcoa kicks off US reporting season with a quarterly loss

Wednesday 09 April 2014 08.28
Alcoa said it lost $178m for the first quarter ending March 31
Alcoa said it lost $178m for the first quarter ending March 31

Aluminium giant Alcoa last night reported a quarterly loss due to heavy restructuring expenses after it shut smelters and rolling mills in response to low aluminium prices.

Alcoa said it lost $178m for the first quarter ending March 31, compared with a profit of $149m the same time last year.

The quarterly results included $276m in restructuring costs. The company announced plans to cut smeltering capacity in Australia and Brazil, among other actions.

"Our transformation is accelerating," said chairman and chief executive Klaus Kleinfeld. "We're powering growth in our value-add businesses and aggressively reshaping our commodity business."

Alcoa has been trimming back capacity due to an 8% decline in aluminium prices in the face of global overcapacity of the industrial metal. 

The company has responded by expanding investment in rolling mills to meet growing demand for lighter metals from an auto industry under pressure to boost fuel economy. It is also investing to produce premium packaging products.

Alcoa continues to forecast 7% global aluminium demand growth in 2014, with the gains fuelled by rising need in aerospace, cars and building and construction. It expects lower demand for industrial gas turbines.

Alcoa's earnings are traditionally watched closely by the market as the unofficial opening of the US quarterly reporting season.

The company said that quarterly revenues came in at $5.45 billion, down from $5.83 billion a year ago and below the $5.55 billion forecast by analysts.

Alcoa continues to forecast 7% global aluminium demand growth in 2014, with the gains fuelled by rising need in aerospace, cars and building and construction. It expects lower demand for industrial gas turbines.

Alcoa's earnings are traditionally watched closely by the market as the unofficial opening of the US quarterly reporting season.

The company said that quarterly revenues came in at $5.45 billion, down from $5.83 billion a year ago and below the $5.55 billion forecast by analysts.