Alcoa’s losses worse than expected
Company could have a tough year
Struggling with sharply lower prices for its products, Pittsburgh-based aluminum giant Alcoa Inc. Wednesday posted a widerthan-expected loss for the fourth quarter and full year.
In addition, the country’s biggest aluminum producer is looking at another tough year ahead, with the company projecting a global glut of aluminum. The forecast is for supply to exceed demand by as much as 1 million metric tons, following a shortfall of between 900,000 and 1.1 million tons in 2019.
For the fourth quarter, the company lost $303 million, or $1.63 per share, vs. a profit of $51 million, or 27 cents, in the same period a year earlier.
For all of 2019, losses ballooned to $1.13 billion, or $6.07 per share. That compares with profits of $250 million, or $1.33 in 2018.
Results in the fourth quarter were dragged down by costs associated with the closing of an alumina refinery in Texas and changes in pension benefits.
Excluding special items, adjusted losses per share were 31 cents for the quarter and 99 cents for the year.
That was higher than the consensus estimate on Wall Street calling for losses of 23 cents and 87 cents.
Revenue for the fourth quarter skidded 27% to $2.44 billion from $3.34 billion. For the year, revenue slumped 22% to $10.43 billion from $13.4 billion. The latest figures for both periods were below expectations.
Results were released after the close of the stock market.
In October, Alcoa announced a multiyear portfolio review aimed at cutting costs and boosting profitability. As part of the review, the company is looking to sell non-core assets and reduce production capacity.
The first asset sale, announced earlier this month, involved a deal to sell a waste treatment facility in Gum Springs, Ark., for about $250 million.
“While 2019 economic conditions posed real challenges to aluminum markets, we are cautiously optimistic for a return to demand growth” in 2020, president and CEO Roy Harvey said in conference call with analysts.