Here we go again, it’s that time of year again and Alcoa $AA gets to go on stage first and surprise, surprise, it’s all about losses from the older cyclical industrial side of $AA. No worries, there will be some bankers to save the day. Look forward to higher growth transport-related special “value added” manufacturing and what shall be a cigar butt.
And now time for some copy-paste monkery of the press release plus quick notes.
Net loss of $500 million, or $0.39 per share; excluding-special items, net income of $65 million, or $0.04 per share
(I just love “excluding-special items”. It’s up there with “normalized for” etc. etc. Extra sarcasm)
Revenue of $5.2 billion, 7 percent revenue increase year-over-year from aerospace and acquisitions more than offset by a 25 percent decrease from lower alumina and aluminum prices, divestitures and closures. Yes, there it is, no surprise. $3.3 billion comes from the “value-add” business and the “Upstream” business brings the drama of declining prices. The future is about breaking this company into one that makes high-end OEM components for plane makers and other customers and into the “Upstream” business which has to shut down smelters.
(As you can see, given the trend in alumina prices and earnings growth in higher-end manufacturing they are looking forward to this breakup/split/spin-off. It’s I-banker “coyote morning” time. It would be nice if karma could make the cigar butt more valuable than the presumptive higher growth “value add” but I doubt it and only if you pay at less than cigar-butt prices. )
(Secret wish if I had one for $AA: Post financial engineering, the side carrying the “Engineered Products & Solutions” business gets “baby out with the bath-water” as if it was the stinky smelty cigar-butt side of the older business, while Mr. Market continues hater mode on all things raw material/”China goes to the mall and not the mines”. That little “engineered products & solutions” business is the crown jewel. If the higher growth side gets re-priced for just one of its divisions then you got something. I doubt it will happen. I need to read reports and wait, it won’t happen immediately.)
Link to the press release below
http://www.alcoa.com/global/en/news/news_detail.asp?pageID=20160111000314en&newsYear=2016
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