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Alcoa Inks $1B Contract with Airbus for Fastening Systems

Alcoa Inc.AA has inked a roughly $1 billion contract with Airbus Group for multi-material aerospace fastening systems. The deal is the aluminum giant's largest fastener contract ever with Airbus.

Under the deal, Alcoa will supply advanced fastening systems, which augment the assembly of aircraft panels and engine pylons on newer airplanes with sophisticated design features. Alcoa's fasteners are made using a number of materials which include stainless steel, titanium and nickel-based superalloys, which improve fatigue life, provide lightning strike protection, and enhance wear and reusability on traditional and composite aircraft. Alcoa will produce these fastening systems at fourteen of its global manufacturing plants.

Fasteners provided by Alcoa will be utilized to assemble some of Airbus's latest high-growth airplanes, including the A350 XWB, Airbus' newest commercial airplane, and the A320neo. Further, Airbus will also use the fastening systems for longer-running platforms including the A330.

Alcoa and Airbus have been collaborating for a decade now and this time Alcoa will provide Airbus with breakthrough technologies for some of the most advanced aircrafts in the world.

Alcoa's shares jumped around 9.4% on the news to close at $10.41 yesterday.

Last week, Alcoa announced that it is splitting into two independent, publicly-traded companies in a bid to drive growth amid a challenging operating backdrop. The transaction, which is subject to specific conditions including final approval by Alcoa's board, is expected to close in second-half 2016.

The separation will result in the creation of two standalone, Fortune 500 entities: "The Upstream Company" and "The Value-Add Company." The Upstream Company will consist of bauxite, alumina, aluminum, casting and energy business units. The Value-Add Company will include global rolled products, engineered products and solutions, and transportation and construction solutions businesses.

Alcoa currently holds a Zacks Rank #5 (Strong Sell).

Some better-ranked mining companies include Asanko Gold Inc. AKG , Endeavour Silver Corp. EXK and Primero Mining Corp. PPP , all carrying a Zacks Rank #2 (Buy).

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ALCOA INC (AA): Free Stock Analysis Report

PRIMERO MINING (PPP): Free Stock Analysis Report

ASANKO GOLD INC (AKG): Free Stock Analysis Report

ENDEAVOUR SILVR (EXK): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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