Are Alcoa’s Earnings the Start of a Turnaround?
January 12, 2016 by Chris LangeAlcoa Inc. (NYSE: AA) reported its fourth-quarter financial results after the markets closed on Monday. The company had $0.04 in earnings per share (EPS) on $5.25 billion in revenue. That compared to consensus estimates from Thomson Reuters of $0.02 in EPS on revenue of $5.29 billion in revenue. In the same period of the previous year, the aluminum producer posted EPS of $0.33 and $6.38 billion in revenue.
The company’s plan to separate into two publicly traded companies is expected to be completed in the second half of 2016. Alcoa is targeting filing with the U.S. Securities and Exchange Commission (SEC) by mid-year, which will include financials and information regarding the form of the separation, legal and capital structure and allocation of assets and liabilities and governance structure, among other items.
After the separation, the innovation and technology-driven Value-Add Company will include Global Rolled Products, Engineered Products and Solutions and Transportation and Construction Solutions.
For full-year 2015, these combined business segments reported revenue of $13.5 billion, after-tax operating income (ATOI) of $1.0 billion and adjusted EBITDA of $2.0 billion, up 5% over 2014.
The Upstream Company will comprise five strong business units that today make up Global Primary Products: Bauxite, Alumina, Aluminum, Cast Products and Energy. In full-year 2015, the combined upstream businesses reported revenue of $11.2 billion, ATOI of $901 million and adjusted EBITDA of $2.0 billion.
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