Alcoa shares slump after Q4 results disappoint
Alcoa on Wednesday reported a wider fourth quarter loss, as rising alumina and aluminum prices were offset by one-time charges for restructuring and taxes.
The Pittsburgh company reported a fourth quarter loss of $196 million, or $1.06 per share, vs. a loss of $125 million, or 68 cents per share, in the year-ago period. Sales rose 25 percent to $3.17 billion.
The results reflect charges of $391 million, primarily related to Alcoa’s decision to permanently close its Rockdale, Texas, smelter and sell an Italian smelter to that country’s economic development agency. The tax-related component of the one-time items included a $22 million charge related to the tax cuts signed into law by President Donald Trump last month.
Excluding the special items, Alcoa reported adjusted fourth quarter income of $195 million, or $1.04 per share, up 44 percent from third quarter levels.
The results fell short of Wall Street estimates. Analysts expected the company to report adjusted fourth quarter earnings of $1.25 per share on revenue of $3.32 billion.
Failing to meet analyst expectations sent Alcoa shares lower in after hours trading. Prior to the earnings news, Alcoa finished Wednesday at $56.99, up 75 cents.
For all of 2017, Alcoa reported net income of $217 million, or $1.16 per share, vs. a 2016 loss of $400 million, or $2.19 per share. Sales rose 25 percent to $11.65 billion.
Alcoa said it has informed U.S. and Canadian salaried employees of its plans to freeze their pension benefits as of Jan. 1, 2021, replacing them with stepped-up contributions to their 401(k) retirement plans. The company also said it will no longer contribute to preMedicare retiree medical coverage for U.S. salaried employees and retirees as of Jan. 1, 2021.