) along with the U.S. Department of Energy commissioned a
modernization project at Cheoah Dam in Robbinsville. The project
involves an investment of approximately $110 million and is part of
Alcoa's Power Generating Inc.'s Tapoco Project, which seeks to
upgrade four hydroelectric dams across the nation.
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The Project got a shot in the arm when the U.S. Department of
Energy granted Alcoa $12.95 million as part of the 2009 American
Recovery and Reinvestment Act. The modernization project has
enhanced the dam's efficiency and energy output as well as extended
its life by about 40-50 years. The purpose of the project was also
to increase the generation capacity and results showed that the
increase was about 50%, which was much more than expected.
The modernization project has also led to a net decrease in total
oil volume of nearly 40,000 gallons in high voltage equipment by
doing away with circuit breaker oil and by lower usage of
transformer oil. The project also supports the use of renewable
energy resources and other recreational activities.
The overall project includes the upgrade of four of the dam's five
power generation units, along with process and utility systems.
Another two units will be upgraded during Phase 2 of the project,
expected to be completed in 2013.
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 bottom
line was hit by lower aluminum prices.
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
), retains a short-term Zacks #3 Rank (Hold). We currently have a
long-term Neutral recommendation on the stock.