) announced that its business unit, Alcoa Wheel and
Transportation, has opened a wheel manufacturing facility in
Suzhou, China. The new opening is consistent with Alcoa's
expansion strategy in China. The company currently has a full
wheel manufacturing, distribution, sales and service network in
The new plant is the first wheel-making facility for Alcoa in
China. The company has similar facilities in North America, Japan
and Europe. With this facility in place, China will benefit from
Alcoa's industry-leading forged aluminum wheel technology that
manufactures lighter, stronger and more fuel efficient commercial
truck, trailer and bus wheels.
For setting up the facility in China, Alcoa received full support
from the Suzhou Wuzhong Economic Development Zone and local
governments that helped the company start operations at the
facility before schedule. Alcoa started sales operations in
Shanghai back in 2004, and has since expanded its sales network
into Guangzhou, Beijing, Jinan and Suzhou.
Alcoa incurred a loss of $143 million or 13 cents for the
third quarter of 2012, driven by a hefty charge associated with
environmental remediation and legal settlement as well as lower
aluminum pricing. It compared with a profit of $172 million or 15
cents a share in the year-ago quarter.
Excluding one-time special items (a $175 million charge mainly
related to environmental remediation of the Grasse River and the
settlement of a civil lawsuit with Aluminum Bahrain), Alcoa
earned $32 million or 3 cents a share in the quarter compared
with the Zacks Consensus Estimate of a break even result.
Revenues decreased 9.1% year over year and 2.2% sequentially
to $5,833 million, but were ahead of the Zacks Consensus Estimate
of $5,565 million. The decline in revenues was attributable to a
17% year over year fall in aluminum prices.
Alcoa witnessed strong productivity growth in its upstream and
downstream businesses in the quarter on the back of higher
utilization rates, process innovations, lower scrap rates and
usage reductions. The company saw healthy demand across the
aerospace and automotive markets in the quarter.
The company has lowered its global aluminum demand forecast to
6% for 2012 from its earlier expectation of 7%, owing to the
slowdown in China. The company, however, expects the aluminum
market to double in 2020 from the 2010 level as the market is
already ahead of the required compound annual growth rate of
Pennsylvania-based Alcoa Inc. is among the world's leading
producers of primary and fabricated aluminum and alumina. The
company competes with
Aluminum Corporation of China Limited
). It currently retains a Zacks #3 Rank, which translates into a
short-term (1 to 3 months) Hold rating and we have a long-term
(more than 6 months) Neutral recommendation on the stock.
ALCOA INC (AA): Free Stock Analysis Report
ALUMINUM CP-ADR (ACH): Free Stock Analysis
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