April 13, 2016

Alcoa Reports Profitable First Quarter

Alcoa, New York, reported first-quarter net income of $16.0 million, a decline from the $195 million in income reported during the same quarter of 2015. Special charges of $95 million substantially reduced the company’s profits during the quarter.

Alcoa’s net sales totaled $4.9 million in the first quarter, a decline of 15.0 percent compared to the same quarter last year. Net sales declined 5.7 percent compared to the prior quarter.

“Each of our segments delivered strong performance,” said Klaus Kleinfeld, chairman and CEO. “Profits grew in all of the Arconic segments, led by automotive and aerospace. Upstream segments maintained profitability in a persistently low pricing environment. Productivity was high across the portfolio, and we divested non-essential assets to strengthen the balance sheet.”

Alcoa has announced plans to split the company into separate businesses, with its Upstream business retaining the Alcoa name and the new downstream business becoming “Arconic.” After the company’s separation, Arconic will include Global Rolled Products, Engineered Products and Solutions, and Transportation and Construction Solutions. In first-quarter 2016, these business segments reported combined revenue of $3.3 billion and after-tax operating income of $269 million. All Arconic segments are on track to deliver $650 million in productivity savings in 2016, executives said.

Among its major end markets, Alcoa projects 6 to 8 percent growth in global aerospace sales in 2016, a slight downward revision from the prior quarter. The market is experiencing a transition period as major original equipment manufacturers shift from incumbent platforms to multiple new platforms simultaneously.

In automotive, Alcoa continues to forecast global production growth of 1 to 4 percent, including 1 to 5 percent growth in North America. Strong U.S. sales, sustained vehicle demand and incentives are driving the North American automotive market. Automotive sales are also strong in Europe and China.

Alcoa also projects flat heavy-duty truck and trailer sales, 1 to 3 percent growth in packaging and 4 to 6 percent growth in building and construction.
 

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Sunday, December 17, 2017