| View previous topic :: View next topic |
| Author |
Alcoa |
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16909
Location: Sunny California
|
 Posted: Tue Jul 11, 2006 7:59 am Post subject: Alcoa |
 |
|
Always one to disappoint AA, Alcoa, recorded its highest quarterly profit in the company's more than 115-year history. At 755million shy of a double is too shy for market.
Sees weaker 3rd on seasonals, autos (hello GM) |
|
| Back to top |
|
 |
| Author |
Alcoa Replies |
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11707
Location: Los Angeles, California
|
| Posted: Thu Apr 12, 2012 12:58 pm Post subject: |
|
|
Morningstar on AA's 1Q earnings. Volume improvement on YOY basis--hard to believe the pervasive pessimistic sentiment compared to that of last year.
| Quote: | | Alcoa AA posted year-over-year shipment growth in all four of its business units, turning a profit of $0.10 per share during a quarter when realized aluminum prices averaged 9% lower than the same period last year when the company posted earnings of $0.28. Aluminum prices climbed only 2.5% compared with fourth quarter 2011 when the company reported a $0.03 per share loss. The majority of the earnings improvement sequentially came from the downstream segments, with both the rolled products and engineered products operations posting higher quarterly margins than we've seen in recent years. Revenue was flat sequentially and compared with the first quarter of 2011, an impressive feat given the lower pricing environment and weakened economic environment in Europe and China compared with a year ago. The alumina and primary aluminum segments suffered under lower pricing compared with a year ago and a slight sequential price improvement was offset by weaker shipments. However, both segments posted volume improvement compared with first quarter 2011 when aluminum sentiment was significantly better than it is today, demonstrating that demand is still improving, particularly for the already strong aerospace and automotive markets. This is despite the volatility of aluminum prices, which continue to react more to global economic sentiment than to the supply and demand trends for the metal. |
|
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11707
Location: Los Angeles, California
|
| Posted: Wed Jan 11, 2012 1:43 am Post subject: |
|
|
Morningstar on AA's 4Q earnings.
| Quote: | | Alcoa AA generated an adjusted net loss of $0.03 per share in the fourth quarter on lower aluminum prices, but the top line held up much better than we expected. Revenue of $5.99 billion was up 6% year over year in the seasonally weak quarter even while aluminum prices ended the year on a weak note, with realized pricing falling 12% in the fourth quarter and 7% compared to the same quarter of 2010. While there are pockets of weakness, namely in Europe, aluminum consumption appears to be holding up quite well, particularly sales in Alcoa's primary metals and engineered products segment. The company forecasts global demand growth of 7% for the metal in 2012 (including no growth expected in Europe), which represents a slowdown from last year's 10% but is still stronger tha n our outlook for steel and other base metals. While input cost inflation continues to be an issue, productivity improvements and cost-control measures have yielded operating margins at or above 2010 levels with the exception of the primary metals segment, with weak aluminum prices serving as the constraint. In the last few days, Alcoa announced the permanent closure of 291,000 metric tons of U.S. capacity that has been idle since 2009 as well as curtailments of 240,000 metric tons of capacity in Europe, which will be completed in the first half of 2012. We think this is reflective of a dismal pricing outlook rather than weakening demand. With aluminum prices hovering around $2,000 per ton, much of Alcoa's smelting capacity is unprofitable on a cash cost basis. Unless the company expected aluminum prices to rebound by at least 15% in the next several months, it doesn't make economic sense in our view to keep running at current operating rates regardless of how strong demand might be. While curtailments should help provide a price floor, we believe that aluminum prices move more closely with global economic sentiment than the supply/demand balance for aluminum tonnage. Management expects 1.8 million tons of global smelting capacity to come off line this year overall. Combined with demand growth, this should offset Alcoa's forecast for 4.5 million tons of additional supply added to the market, primarily in China. However, we think more clarity around global economic growth, particularly in Europe and China, will be the catalyst for stronger aluminum pricing in 2012. We do not see much room for aluminum prices to fall below current levels, given our estimation that about one third of all smelting capacity is unprofitable at current prices, most of which is in China, but we think curtailments alone will not significantly move the needle to support the metal price. |
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16909
Location: Sunny California
|
| Posted: Wed Jan 04, 2012 7:28 pm Post subject: |
|
|
This dog of Dow is in its own special purgatory now---now that the tax dump is over. Hard to believe they'll find an audience again having so long fallen from grace and given nothing but bitterness to what few investors chased a commodity "value play." Indeed one would think that after this stock could find no purchase in a boom, it never will.
Two things:
China: this is still a currency hedge as much as a commodity. As the slowdown sinks in (without the concomitant savings on energy) aluminum production will get squeezed from all sides.
CAFE 55: Ford is going with aluminum panels on the F-150 next year on a US 14m SAAR. --'Nuff said.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11707
Location: Los Angeles, California
|
| Posted: Thu Oct 13, 2011 11:10 am Post subject: |
|
|
rffydr, Morningstar agrees with you:
| Quote: | A key aspect of Alcoa's moat is becoming increasingly important to the company's value.
Alcoa AA reported adjusted earnings of $0.14 per share in the third quarter, but we hesitate to label the results as disappointing. Aluminum prices have declined on the London Metals Exchange (LME) some 20% since May, and the company continues to battle higher prices for raw materials and energy, causing the earnings to decline from $0.32 per share in the second quarter. However, we don't think the results suggest an impending deep recession that the market is essentially pricing in, with the stock down about 35% year to date. Volumes were roughly flat sequentially, with stronger-than-expected consumption in China offsetting weakness in Europe. Even with the drastic drop in the price of aluminum, the company's sales only declined 3% sequentially. Alcoa also confirmed their prior forecast for a 12% increase in aluminum consumption in 2011, suggesting that volumes are unlikely to be off materially in the fourth quarter, either.
We think the drop in aluminum prices has more to do with the market's fears regarding global economic growth than a true deterioration in the demand for aluminum. While we concede that Alcoa's fourth-quarter earnings are likely to also decline sequentially, as aluminum prices are currently at a low point for the year and we're heading into a seasonally weak quarter, we think prices will find support, as costs have yet to recede, putting the current LME price below the marginal cost of production. The year-over-year comparison for the second half of 2011 should appear favorable, as aluminum consumption patterns are still quite healthy relative to 2010. Visibility is low, but we do not yet see the signs of a contraction in aluminum demand, and we think Alcoa's shares look very compelling at current levels. |
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16909
Location: Sunny California
|
| Posted: Wed Oct 12, 2011 7:34 am Post subject: |
|
|
Let's take a closer look at the "worst"
· With the exception of Europe, end markets grew, but at a slower pace than the first half 2011.
· Growth was still expected at 12% in 2011 on top of 13% growth in 2010.
· Increased demand in China, growth was raised by 2% to 17%, will offset weakness in Europe and
other regions. THIS STATEMENT MAY EASE HARD LANDING WORRIES IN CHINA.
· Global year over year end market outlook remains positive.
· Commercial transport outlook mixed and weaker in H2 2011. Softness in Europe and China was
noted. North America was expected to be positive. Heavy truck and trailer sales are expected to be
flat to 2%.
· Aerospace demand will grow in H2 with a year end rate of 6-7%.
· Automotive growth is expected to rise 3-5% y/y
· Growth is present in China.
· Aluminum beverage can in China, Europe, and the Mideast offset weakness in the US. Overall
packaging demand is expected to rise 2-3%.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11707
Location: Los Angeles, California
|
| Posted: Wed Apr 13, 2011 9:07 am Post subject: |
|
|
Morningstar on AA's 1Q earnings:
| Quote: | | Alcoa's AA first-quarter revenue was up 5% sequentially on higher aluminum prices and better volume, supporting margins with continued productivity improvements, but cost challenges partially offset these impacts on the bottom line. A weak U.S. dollar in addition to higher energy and raw-material costs weighed on earnings, which came in at $0.28 per share. The market may be a little disappointed to see only 5% top-line growth during a seasonally better quarter combined with better pricing, but the company reaffirmed its outlook for a 12% increase in aluminum consumption in 2011, which is impressive relative to other metals. Further, Alcoa has positive momentum heading into the second quarter as aluminum prices, which have a 15-day lag effect in hitting the firm's earnings, have continued to rise in April and are currently at the highest level since the fall of 2008. On the flip side, Alcoa's stock price is also sitting at a 2.5-year high, and we believe aluminum prices will need to continue their upward trend in order for the shares to climb higher. We think capacity restarts in China and elsewhere, including Alcoa's restarts in the United States, are likely to get ahead of order rates and keep the market in surplus, which would weigh on aluminum prices. Political unrest in the Middle East, an area that is becoming increasingly important on the supply side of the aluminum equation, may be supporting prices in the past few weeks, but we suspect this is a short-term phenomenon and aluminum prices for the remainder of the year will ultimately depend on whether higher production rates overshoot improving demand. |
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16909
Location: Sunny California
|
| Posted: Tue Apr 12, 2011 6:38 am Post subject: |
|
|
A decade of failed share price in the middle of the biggest commodity boom in, say?.... history? Hard Asset bulls have to think long and hard on this one.
Power efficiencies continue to pay off:
| Quote: | | The sequential increase in revenue was primarily due to a 7% increase in Alumina and a 17% increase in Flat-Rolled Products. Cost of goods sold as a percent of revenue was 79.1%, an improvement of 120 basis points from the fourth quarter and a 300 basis point improvement from the year-ago quarter. The improvements were due to higher pricing and volume, somewhat offset by higher energy and raw material costs. |
And toward that end, energy conservation, the company has chosen for its "vision." Carbothermic aluminum reduction and recycling. At some point we will be trading Alcoa as an energy company.
Time to buy is time of convertible yuan....and open outward chinese fund flows.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16909
Location: Sunny California
|
| Posted: Thu Jan 14, 2010 9:05 am Post subject: |
|
|
The trail of disappointments continues: 43% drop in demand for autos; 21% for aircraft.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16909
Location: Sunny California
|
| Posted: Mon Oct 12, 2009 12:19 pm Post subject: |
|
|
Until the covertibility of a market-like renmenbi the threat of flooding out western producers remains. Aluminium remains as much a conduit of foreign exchange and tax planning as electrical current. Engery is the key variable for chinese production right now after six months of dollar flight inspired hoarding. On this score Alcoa's new hydro-powered facilities in remote Iceland and port rationalization in Western Australia will help create a more stable future for this perenial under-achiever.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
HenryTo
Site Admin
Joined: 06 Aug 2004
Posts: 11707
Location: Los Angeles, California
|
| Posted: Thu Oct 08, 2009 10:18 am Post subject: |
|
|
Morningstar's latest notes on Alcoa's 3Q earnings. Note that the author of the piece is Chinese:
| Quote: | Alcoa AA reported a third-quarter profit of $0.08 per share due to recovering aluminum prices and an asset-sale gain of roughly $100 million (about $0.10 per share). Average selling prices for aluminum recovered by roughly 30% from second-quarter levels, largely in line with spot price improvements between July and September. This price improvement is odd given record high inventory levels on the London Metals Exchange (LME). One big reason for this discrepancy is that much of the LME inventory is tied up in financial contracts for long-term delivery, and thus is not available in the spot market, driving up spot prices. Although this massive inventory overhang did not affect third-quarter prices much, it will need to be absorbed some day, and this will drag out aluminum market recovery. It is impossible to discuss aluminum outlook without touching upon China, as China produces and consumes roughly 30% of the world's aluminum. Chinese demand was an important force behind third-quarter price recoveries, as imports soared since March. However, the Chinese market had moved to a near-term surplus by the third quarter due to domestic smelter restarts and six months' worth of high imports. In fact, Chinese imports have been on a declining trend since July, and this contraction will likely ease the aluminum market further going into the fourth quarter. (In fact, spot aluminum prices have been correcting downward since mid-August.) Longer term, though, we think Chinese aluminum production will not threaten the global supply-demand balance, as the government refrains from giving out new smelter permits in the next three years and will slowly curtail low-technology smelters. Therefore, we believe the worst is over for Alcoa, although recovery w ill most likely take a long time. A bright spot within Alcoa's results is on the alumina side. Operating margins improved to 12% from the second quarter's negative 2%, due to better prices and lower costs. In September, Alcoa opened the Juruti bauxite mine in Brazil. This places Alcoa's upstream assets in the first quartile on the global production cost curve. The refinery expansion is on schedule for commissioning later this year. Bauxite mining and alumina refining are the more attractive businesses in the aluminum value chain, and we expect Alcoa to remain a viable low-cost competitor on the alumina side over the long run. We are keeping our fair value estimate unchanged.
Min Ye |
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16909
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16909
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16909
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16909
Location: Sunny California
|
|
| Back to top |
|
|
rffrydr
Moderator
Joined: 30 Oct 2005
Posts: 16909
Location: Sunny California
|
| Posted: Wed Jun 11, 2008 10:45 am Post subject: |
|
|
...And the model of recycling--which exposed just how limited recycling was. Their new plant on the new dam in bleak and barren eastern iceland should set a model for aluminium smelting. If only they could get that nat gas one in Nigeria to work instead of flaring to air.
_________________
Today is the Tomorrow you worried about Yesterday! |
|
| Back to top |
|
|
Please log in to view without the ad banners |
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Memberlist
Usergroups
Statistics
Register
Profile
Log in to check your private messages
Log in
