[转贴] Earnings Preview: Alcoa

farshine

Alcoa Inc. (AA), the largest U.S. aluminum producer, announced that it would release its results for the fourth quarter of 2011 after the market closes on January 9, 2012.

Alcoa Inc. reported adjusted earnings per share of 15 cents per share, missing the Zacks Consensus Estimate of 22 cents per share. Adjusted earnings more than doubled from 6 cents per share reported in the year-ago quarter, but were down 46.4% than the sequential quarter earnings of 28 cents per share due to lower metal prices, seasonal factors and weakness in Europe.

With respect to earnings surprises, the company was behind the Zacks Consensus Estimate in the trailing two quarters. Moreover, Alcoa was ahead of the Zacks Consensus Estimate in the first quarter of 2011 and fourth quarter of 2010. This is reflected in the average earnings surprise of -7.00%, with negative surprises in two quarters and positive in two.

Third Quarter Review

Revenues for the quarter were up 21% year over year to $6.419 billion, and were down from $6.585 billion in the sequential quarter. Alcoa’s end-markets demonstrated strong revenue growth on a year-over-year basis, whereas the company experienced mixed market conditions sequentially.

Revenues declined for both alumina and aluminum, down 5% and 1%, respectively, driven by lower alumina shipments and lower realized pricing in both businesses. In the end-markets, revenues increased in commercial transportation (6%) and aerospace (2%), while plummeted in automotive (7%), industrial products (6%), building and construction (5%), and packaging (4%).

The company’s adjusted EBITDA was $821 million, up 36% from the third quarter of 2010, but down 21% from the second quarter of 2011.

Alumina: The shipments in the reported quarter increased 7.4% year over year to 2.3 million metric tons on production of 4.1 million metric tons. The After Tax Operating Income (ATOI) increased 120% year over year to $154 million, but decreased 17% sequentially.

In the reported quarter, results were impacted by lower pricing on the London Metal Exchange (LME) and lower index pricing. However, increased energy and raw materials costs were offset by improved productivity, higher volumes, and positive currency impact. Adjusted EBITDA fell 7% sequentially to $311 million.

Primary Metals: Shipments in the third quarter of 2011 amounted to 0.8 million metric tons, an increase of 6.5% from the year-ago quarter. Third-party realized metal prices decreased 5% sequentially driven by declining LME cash prices. Production increased by 8.2% year over year to 0.96 million metric tons. ATOI was $110 million, an increase of 41% over the third quarter of 2010 and a decrease of 45% from the second quarter of 2011.

Flat-Rolled Products: Shipments in the quarter inched up 1.3% year over year to 4.5 million metric tons. ATOI decreased by 9% over the previous year quarter to $60 million and declined 39% from the second quarter of 2011. Third-party revenue in the third quarter was $2.0 billion, up 20% year-over-year and down 5% sequentially. The weak performance was driven by significant deterioration in the European markets, seasonal plant shutdowns and rising costs.

Engineered Products and Solutions: Shipments in the quarter surged 9.8% year over year to 0.56 million metric tons. ATOI in the third quarter totaled $138 million, up 21% year over year and down $ 7% sequentially. Lower ATOI was mainly driven by unfavorable price and mix across most businesses as well as the cost impact of flooding at the Bloomsburg, PA, plant. The ATOI improved on a year-over-year basis due to higher volumes across all businesses supported by a strong portfolio of innovative products.

Agreement of Estimate Revisions

For the fourth quarter of 2011, five out of 11 analysts covering the stock have made a downward revision in the last 30 days and 2 amongst them have made a downward revision in the last 7 days. None of the analysts have made any upward revision in the last 30 days.

Magnitude of Estimate Revisions

The fourth quarter 2011 estimate was 17 cents per share in the last 30 days and inched down 2 cents to 15 cents per share in the last 7 days. Recently, it dropped again by 1 cent to 14 cents per share. The Zacks Consensus Estimate for the fourth quarter is 83.33%, down from the year-ago quarter.

Alcoa Cuts Smelting Capacity

Just a few days before its earnings release, Alcoa announced its plans to slash its global smelting capacity by 12%. Therefore, the company became the first producer to take instant action to slash costs amid a steep drop in metal prices. The move will result in a restructuring charge in the fourth quarter and will push the U.S. producer into its first loss in nine quarters. The reduction in costs is likely to boost prices

The company will permanently close its smelter in Alcoa, Tennessee, which was curtailed in 2009, along with two of the six idled potlines at its Rockdale, Texas smelter.

The curtailments, to be announced in the near future, will reduce Alcoa’s global smelting capacity by an additional 240,000 metric tons, or about 5%.

The curtailments are expected to be complete by the first half of 2012. Alcoa’s alumina production will be reduced across the global refining system to reflect the final curtailments in smelting as well as prevailing market conditions. The curtailments will contribute to the company’s long-term goal of lowering Alcoa’s position on the world aluminum production cost curve by 10 percentage points.

Total restructuring-related charges for the fourth quarter of 2011 are expected to be between $155 million and $165 million after-tax, or $0.15 to $0.16 per share, of which approximately 60% is non-cash.

Our Take

Alcoa Inc., a Pennsylvania-based corporation, is among the world’s leading producers of primary and fabricated aluminum and alumina. The company is engaged in the technology of mining, refining, smelting, fabricating and recycling of aluminum. We believe that Alcoa’s cost reduction efforts are to some extent, offsetting the negative impact of higher energy and raw material costs on profitability.

Alcoa expects aerospace, and automotive demand to remain strong. Alcoa forecasts aerospace demand to continue to grow in the second half of 2011 and the year-end growth rate will be between 6% and 7%. In the automotive market, Alcoa projects continued growth in the second half of 2011 and a year-over-year improvement of 3% to 5%.

Growing demand for aluminum beverage cans in China, Europe, and the Middle East will offset flat to declining markets in the United States and will drive overall packaging market in the range of 2% to 3% in 2011 compared to 2010. The recovery in the industrial gas turbine market continues to support a brighter long-term outlook and a 2011 growth projection of 5% to 10%.

The building and construction market continues to struggle in North America and Europe, leading to a growth projection of 1% to 3%, primarily due to continued strength in non-residential construction in China.

The outlook for commercial transportation is mixed, with a weaker second half of 2011, driven primarily by lower sales in Europe and China, offset by strong first-half results and continued gains in the North American market. Alcoa projects heavy truck and trailer sales to range from flat to 2% growth over 2010.

Currently, Alcoa has a short-term (1 to 3 months) Zacks #3 (Hold rating) and a long-term (6 months) Neutral recommendation.

Alcoa faces stiff competition from Aluminum Corporation Of China Limited (ACH), Rio Tinto Plc. (RIO) and BHP Billiton Ltd. (BHP).

何鸿燊

回复 1# farshine


    Alcoa Cuts Capacity, Shares Follow Suit Ahead of Earnings


Call volume on AA approached peak levels ahead of the announcement

by Karee Venema (kvenema@sir-inc.com) 1/6/2012 11:30 AM


Hoping to reduce the impact of falling metal prices and higher costs, aluminum giant Alcoa Inc. (AA - 9.10) last night announced it will cut global smelting production by 12%, including permanent closures at its Alcoa, Tenn.-based plant and two of its Rockdale, Texas-based plants. The initial closings will decrease AA's annual output by approximately 291,000 metric tons, with an additional 240,000 metric tons of reductions on the horizon.

With AA on tap to report fourth-quarter earnings on Monday, the company will take a restructuring charge in the current quarter of roughly $155 million to $165 million, or 15 cents to 16 cents per share, due to the cutbacks -- prompting Citi to forecast that AA will likely record its first loss since 2009.

Wall Street is not taking kindly to the news, with AA trading more than 2% lower in today's session, cutting into its 8.2% weekly gain. The stock is coming off a rough one, with its 2011 plummet earning it the honor of being the second-worst Dow Jones Industrial Average (DJIA) performer of the year. Although AA has experienced a recent price rally, the security continues to meet resistance at its descending 50-day moving average -- a trendline that steadily pushed AA lower in the latter half of 2011.


AA price chart

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2012-1-6 21:20

Despite AA's shaky fundamental and technical backdrops, sentiment surrounding the equity has been mixed. Zacks reports that eight analysts maintain a "buy" or better recommendation toward the stock, compared to nine "hold" or worse suggestions.

Elsewhere, however, AA's Schaeffer's put/call open interest ratio (SOIR) of 0.70 ranks in the 28th percentile of its annual range, showing that short-term speculators are more bullishly aligned than usual toward the stock.

Echoing this optimistic outlook, over the course of the past 50 trading days, investors on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open nearly four calls for every one put. Furthermore, this ratio ranks just one percentage point from a 52-week peak -- indicating that bullish bets are being scooped up over bearish ones at a near annual-high clip.

Delving a little deeper, this recent uptick in call volume may simply be investors outside of the options arena hedging their pessimistic positions. Short interest has risen 5.7% in the past month, and now accounts for a healthy 5.4% of the stock's available float.

From a contrarian perspective, the stock may continue to struggle in its price direction. With short interest at lofty levels, and a possible fourth-quarter loss looming overhead, more bearish bettors may be encouraged to jump on board.

aimei

try to short CENX by the market close on next Monday?

西门吹雪

farshine

好酒

提起 Alcoa恐怕有些人不知道，但是提起股票符号AA大家都兴奋起来，这是一家美国上市的企业，是道琼斯指数公司(Dow Index)，这家公司的盈利状况(ER)，经常影响整个股市的走向。提到Alcoa，就得提它的创始人Charles Martin Hall(查理豪)。查理豪于1863年生于俄亥俄州，1885年毕业于欧伯林大学(Oberlin College)，他是铝合金(Aluminum)的发明者，也是英文Aluminum一词发音的始创者。1888年 Alcoa在宾夕法尼亚州成立，至今有123年的历史。查理豪终身未婚，1914年在佛罗里达州去世，身后留下巨额存款。

19世纪末20世纪初欧伯林大学的毕业生满怀基督的大使命，走向全世界各地去传讲耶稣死而复活的福音，其中大部分的海外传教在中国展开。孔祥熙就是毕业于欧伯林大学最早的中国人。因为义和团运动后，孔祥熙帮助欧伯林大学处理在山西太谷县被杀欧伯林大学师生传教士的后事，而感动欧伯林大学，欧伯林大学提供资助让孔祥熙来美国留学。孔祥熙从欧伯林大学毕业，又到耶鲁大学深造，毕业后拿着欧伯林大学的基金回山西太谷县建立欧伯林分校--铭贤学校(1907年)。 所以欧伯林大学对中国情有所钟，许多传教士从中国回到母校介绍中国的情况，激起欧伯林大学毕业生的兴趣，纷纷投入中国传教的事工。查理豪受到这种激情的影响，死前留下遗嘱，将全部财产奉献给中国亚洲文化发展事业。

1919年美国人在北京西郊将美国美以美会(Methodist Church)的汇文大学，美国公理会(Congregational Church)的华北协和女子大学，和通州协和大学合并成立燕京大学(Yenching University)，司徒雷登(John Leighton Stuart)当上校长(见毛主席的<<别了，司徒雷登>>一文： “司徒雷登是一个在中国出生的美国人，在中国有相当广泛的社会联系，在中国办过多年的教会学校，在抗日时期坐过日本人的监狱，平素装着爱美国也爱中国，颇能迷惑一部分中国人...."). 司徒雷登拿到查理豪基金，于1926年将燕京大学全部建成。后来中国人自己的大学北京大学同燕京大学合并，从城里搬到现在的北京西郊地址，即燕京大学原校址。1928年美国哈佛大学又用查理豪基金建起哈佛--燕京学社，主要研究中国和亚洲文化。

farshine