) announced that it will assist the U.S. Environmental Protection
Agency (EPA) for the Proposed Remedial Action Plan (PRAP) to clean
up the Grasse River, polluted by an Alcoa aluminum plant near New
York's northern border. Alcoa has collaborated with the EPA to
assess alternative remedies to deal with increased levels of
polychlorinated biphenyls (PCBs) in fishes in the lower Grasse
Alcoa submitted an Analysis of Alternatives (A of A) report,
which was prepared under the guidance of the EPA and other
stakeholders. The EPA explored 10 different cleanup alternatives
and PRAP is one of the options mentioned in the "A of A" analysis.
The PRAP is also open to suggestions from the public till November
15, 2012. After the comments are received from the public, EPA will
issue a final Record of Decision (ROD).
ALCOA INC (AA): Free Stock Analysis Report
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The ROD will be reviewed, after which the planning and designing is
expected to take two to three years, followed by the actual
remediation field work that is expected to take nearly four years.
The majority of funding for the project will be spent between 2016
and 2020. Alcoa expects to incur an associated after-tax charges of
about $85 million or 8 cents per share in its third quarter 2012
Alcoa is a leading producer of primary and fabricated aluminum as
well as the world's largest miner of bauxite and refiner of
alumina. The company released its second-quarter 2012 results in
July 2012. It posted a loss of $2 million (break-even on a
per-share basis) in the quarter compared with a profit of $322
million (or 28 cents a share) in the year-ago quarter. The
company's bottom line was hit by lower aluminum prices during the
Excluding one-time special items (including restructuring and other
charges, litigation expenses and tax-related items), Alcoa earned 6
cents a share in the quarter, in line with the Zacks Consensus
Estimate but below the year-ago earnings of 32 cents a share.
Revenues decreased 9.4% year over year to $5,963 million,
surpassing the Zacks Consensus Estimate of $5,828 million. Though
weak aluminum prices dragged down revenues, the company witnessed
increased demand across aerospace and automotive markets in the
quarter. Aluminum prices dropped 18% year over year and 4%
sequentially in the quarter.
Alcoa witnessed strong performances across all its businesses
during the quarter, driven by higher utilization rates, process
innovations, lower scrap rates and usage reductions. The company
expects higher demand for aluminum from automobile, aerospace,
packaging and commercial transportation end markets in the near
Alcoa, which competes with
Aluminum Corporation of China Limited
), currently retains a short-term Zacks #3 Rank (Hold) and we have
a long-term Neutral recommendation on the stock.