Alcoa Power and Propulsion, a business unit of aluminum giant
), announced the signing of a long-term deal with Siemens Energy
to supply blades and vanes for a wide range of industrial gas
turbines. Specific terms of the contract were not revealed, but
the company stated that production will be done at Alcoa Power
and Propulsion operations in the US and Europe.
Siemens Energy, the energy division of
) is one of the world's leading suppliers of products, solutions
and services in the energy technology field.
Alcoa said that the parts to be supplied to Siemens will be used
for the production of its F-Class turbine, among other designs.
Alcoa's blades and vanes operate in those sections of the turbine
where temperatures sometimes exceed the melting point of the
casting and the rotational rate exceeds the speed of sound.
Alcoa's technology enables the optimal functioning of the
castings, thus providing the customers with reliable electric
Alcoa Power and Propulsion is a global leader in airfoil and
structural investment castings and serves the aerospace, defense,
energy and industrial markets. Alcoa Inc. is among the world's
leading producers of primary and fabricated aluminum and alumina.
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 unfavorably with a profit of $172
million or 15 cents a share in the year-ago quarter.
Excluding one-time special items 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
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
RIO TINTO-ADR (RIO): Free Stock Analysis
SIEMENS AG-ADR (SI): Free Stock Analysis
To read this article on Zacks.com click here.