) has announced the possibility of a cutback in aluminum
production. The company said that it will review 460,000 metric
tons of smelting capacity over the next 15 months for potential
curtailment. Alcoa is taking this step to maintain its
competitiveness as aluminum prices have declined by more than 33%
from their peak level in 2011.
Alcoa has already idled 13% or 568,000 metric tons of smelting
capacity and the possible curtailments will account for 11% of
its global smelting capacity. While reviewing over the next 15
months, Alcoa will take into consideration plants that have
long-term risk such as high energy costs or regulatory
Alcoa's strategy of curtailments is consistent with its
previously announced 2015 goal of lowering its position on the
world aluminum production cost curve by 10 percentage points and
the alumina cost curve by 7 percentage points.
Alcoa remains on track to move down the cost curve and
curtailed capacities in its upstream business. The curtailments
will improve the competitiveness of the company's Primary
A month ago, Alcoa released its first-quarter 2013 results.
The company's revenues were hurt by lower aluminum prices and
reduced production in Alcoa's European primary metals business.
Revenues declined roughly 3% to $5,833 million from $6,006
million in the year-ago quarter and were below the Zacks
Consensus Estimate of $5,857 million.
The company posted a profit of $149 million or 13 cents per
share in the quarter, exceeding the profit of $94 million or 9
cents per share earned a year ago. The results were driven by
strong demand across the aerospace and auto markets.
Excluding one-time special items, Alcoa earned $121 million or
11 cents a share in the quarter, beating the Zacks Consensus
Estimate by a penny and also coming ahead of $105 million or 10
cents per share posted in the year-ago quarter.
Alcoa currently retains a short-term Zacks Rank #3 (Hold).
Other companies in the mining industry with favorable Zacks
Atlatsa Resources Corporation
Anglo American Platinum Ltd.
). All of them hold a Zacks Rank #2 (Buy).
ALCOA INC (AA): Free Stock Analysis Report
ANGLO AMER PLAT (AGPPY): Get Free Report
ATLATSA RESRCS (ATL): Free Stock Analysis
CAMECO CORP (CCJ): Free Stock Analysis Report
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