Alcoa, Inc. (AA: Quote), the largest U.S. aluminum producer, said Tuesday after the markets closed that it swung to a fourth quarter profit, helped by gain on asset sales and lower restructuring charges, even as revenue edged down 2% due to low aluminum prices.
The company's quarterly earnings per share, excluding items, came in line with analysts' expectations, but its quarterly sales topped analysts' forecast.
The company also said it expects global aluminum demand to grow 7% this year, up from 6% in 2012 and ahead of the 6.5% rate required to meet its forecast of a doubling in global aluminum demand between 2010 and 2020.
"Alcoa hit record profitability in our mid and downstream businesses, and continued to drive efficiency in our upstream businesses in the fourth quarter, all while cutting debt and maintaining our cash position," said Klaus Kleinfeld, Alcoa Chairman and Chief Executive Officer.
Alcoa shares are currently gaining 1.32% in after hours trading after closing the day's regular trading session unchanged at $9.10. The shares trade in a 52-week range of $7.97 to $10.92.
The company's Alumina segment reported an after-tax operating income, or ATOI, of $41 million for the fourth quarter, down from $125 million in the same quarter last year. Alumina production totaled 4,079 kmt in the fourth quarter, down from 4,178 kmt in the fourth quarter of last year.
The company's Primary Metal segment reported after-tax operating income of $316 million for the fourth quarter, compared to an after-tax operating loss of $32 million in the same quarter last year.
Fourth quarter ATOI for the company's Global Rolled Products segment jumped 165% to $69 million from $26 million in the prior year quarter.
Fourth quarter ATOI from the company's Engineered Products and Solutions segment grew 12% to $137 million from $122 million in the year-ago quarter.
For the fourth quarter ended December 31, 2012, the company reported net income of $242 million or $0.21 per share, compared to a net loss of $191 million or $0.18 per share for the year-ago quarter.
The latest quarter results include special items that delivered a net gain of $178 million, mainly associated with the closing of the Tapoco Hydroelectric Project asset sale. Another $78 million in gains, including those associated with discrete income tax items and the positive impact of mark-to-market changes on certain energy contracts, were mostly offset by the negative impact of restructuring, primarily related to plant curtailments and asset impairments, and the Massena, New York site fire.
Excluding special items, adjusted earnings for the latest quarter were $64 million or $0.06 per share.
On average, 18 analysts polled by Thomson Reuters expected the company to earn $0.06 per share for the fourth quarter. Analysts' estimates typically exclude special items.
Alcoa, the first Dow 30 company to report fourth quarter earnings, said sales for the quarter fell 2% to $5.90 billion from $5.99 billion in the same quarter last year. Eleven analysts had a consensus revenue estimate of $5.60 billion for the fourth quarter.
For the full year 2012, the company reported net income of $191 million or $0.18 per share, compared to $611 million or $0.55 per share for the full year 2011.
Income from continuing operations for the full year 2012 was $191 million or $0.18 per share, compared to $614 million or $0.55 per share in 2011. Excluding the impact of special items, income from continuing operations was $262 million or $0.24 per share for 2012, compared to $812 million or $0.72 per share for 2011.
Full year 2012 revenue fell to $23.7 billion from $25 billion in 2011.
Analysts expected the company to earn $0.24 per share on revenue of $23.35 billion for the full year 2012.
Alcoa said Tuesday that it is actively negotiating with the Department of Justice and the Securities and Exchange Commission to reach a resolution of their investigations of the Alba matter; but that it has not reached any agreement with either agency.
Alcoa was among the companies that were hit most during the recession. The company cut more than 20,000 jobs and closed plants in the U.S. and Europe to tide over the global economic slowdown.
The company has taken further steps to cut costs and reallign production in order to remain competitive.
Alcoa said Tuesday that it has now completed its planned closure or curtailment of 531,000 metric tons, or 12%, of its highest-cost system smelting capacity.
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