) has launched the most advanced alloy for aluminum wheels. The
new alloy called MagnaForce is lighter and is on an average 16.5%
stronger than the industry standard 6061 alloy, also made by
Alcoa. The new material also provides the same
corrosion-resistance as compared with this industry standard.
Alcoa will utilize the new material to make wheels for commercial
transportation, where demand for lightweight material is high,
and to increase fuel efficiency. According to Alcoa, MagnaForce
will ensure the strongest and lightest wheels as required to
increase fleet payload and enhance stability along with reduced
Alcoa invented the forged aluminum wheel in 1948 and has been the
industry leader for the last 65 years. Alcoa launched the 6061
alloy about 45 years ago which is still used by all major forged
aluminum wheel makers. Alcoa expects that MagnaForce will make
its first commercial appearance as a new Alcoa forged aluminum
truck wheel early next year.
Alcoa serves the transportation market through its business unit
Alcoa Wheel and Transportation Products. The unit is part of
Alcoa's downstream business, Engineered Products and Solutions.
In the third quarter of 2013, Engineered Products and Solutions
contributed 25% of the company's total revenues.
A few days ago, Alcoa released its third quarter results. The
company posted a profit of $24 million or 2 cents per share in
the quarter compared with a loss of $143 million or 13 cents per
share in the year-ago quarter. The results include restructuring
and other one-time charges/gains of $96 million.
Excluding one-time special items, earnings were $120 million
or 11 cents a share in the quarter, much ahead of the year-ago
earnings of $76 million or 7 cents per share and Zacks Consensus
Estimate of 6 cents. Productivity gains, strong demand from auto
makers, healthy operating performance and cost cutting supported
the results despite lower metal prices.
Revenues dropped roughly 1.2% to $5,765 million from $5,833
million in the year-ago quarter but exceeded the Zacks Consensus
Estimate of $5,713 million. The decline was due to weak aluminum
prices, offset by strong demand in the aerospace and automotive
Alcoa reiterated its global aluminum demand growth expectation of
7% for 2013.
Alcoa, a prominent player in the mining industry along with
Aluminum Corporation of China Ltd
Atlatsa Resources Corp.
BHP Billiton Ltd
), is a world leader in production and management of primary
aluminum, fabricated aluminum, and alumina. The company is also
the world's largest miner of bauxite and refiner of alumina.
Alcoa currently retains a short-term Zacks Rank #3 (Hold).
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