Boston, MA 07/24/2013 (wallstreetpr) – Alcoa Inc (NASDAQ:AA), 125 yr old aluminium giant reported strong operational performance offset by extraordinary events. Excluding the effect of special item, the company reported Net income of $0.07 per share or $76 million. Whereas including special items of $195 million, primarily for restructuring and legal matters, it is a Net loss of $0.11 per share or $119 million.
With strong top line of $5.8 billion for 2Q13 and free cash flow generated of $228 million, Alcoa has managed decent numbers for its investors to cheer, in spite of the Net loss.
The outlook for the white metal is miserable as Spot prices are down by more than 15% since the beginning of the year, creating a serious concern around the industry. Falling commodity prices is a threat to company’s ability to maintain its top line. Alcoa has initiated certain critical cost cutting measures to mitigate the concerns by improving its bottom line performance. The company has a target of cutting the cost by $750 million by end of 2013. In its quarterly presentation for the June ending quarter the company has declared that $539 million of productivity savings have been achieved across all business segments.
Major achievement in 2Q13 was improvement in working capital cycle with record 27 days, 6 days lower than previous quarter which is equivalent to $400 million cash. Alcoa closed the quarter with $1.2 billion cash and $566 million reduction in debt.
The event to look forward having impact on operational performance is “The Alba issue’, where, Alcoa seeks to resolve the matter with DOJ and SEC through settlements. Currently, there is a potential of an additional charge of approx. $200 million to settle the DOJ matter.
The stock closed at $8.16 as on July 23, 2013.
