Boston, MA 07/23/2014 (wallstreetpr) – Michael Morris Buys Shares
In a positive outlook for the Alcoa Inc (NYSE:AA) Director Michael Morris has bought 30,120 shares of the common stock for an average price of $ 16.54 per share. This is a good sign for the company, as other key holders of the company were busy disposing their shares or exercising employee stock options. Also, unlike other companies, Alcoa has not seen such a move from a director since the year 2014.
Alcoa Beats Estimates
Alcoa, an aluminum smelter for more than a century, has seen profits in this same primary business of aluminum smelting. Beating the loss of $32 million last year, the aluminum smelting units helped post a $97 million after tax operating earnings. This is an after effect of the demand that rose recently. Alcoa rose as much as 4.4 percent though some of its inefficient plants were shut down. Second quarter profit rose 18 cents a share excluding restructuring costs and beating the 12 cents average estimate of the Bloomberg analysis. Though the company is focusing to expand in the lightweight metals industry of automobiles and aerospace, analysts believe that the core area of aluminum smelting is the area that the company cannot overlook. The second quarter average shows that the sales changed little at $5.84 billion compared to $5.65 billion of the previous year average.
The Deal with Pratt & Whitney
Alcoa sealed a deal of $1.1 billion with Pratt & Whitney as a part of which it would be supplying the later with the state of the art aluminum metal for jet engine fan blade. Whitney would also use the aluminum metal for development of aluminum-lithium alloy through its propriety forging process. This is step forward in creating fuel efficient jet engines that mitigate noise levels and harmful gas emissions. Also, the hybrid metallic fan blades produced by light weight aluminum would engineer the production of highly efficient aerospace engines.
Acquiring Firth Rixson
Alcoa Inc (NYSE:AA) has entered into a deal to buy out Firth Rixson, a company that engages in making of jet engine parts mostly using nickel based alloys and titanium. Firth Rixson has operations in the U.S, Europe and China. The deal is set at $2.35 billion in cash and $500 million of stock. Alcoa had secured interim financing for this deal from Morgan Stanley (NYSE:MS). Though a traditional aluminum smelter, Alcoa Inc (NYSE:AA) has tasted success in supplying lightweight metals in automobile and aerospace industry and is highly excited about this move.
