Alcoa (NYSE:AA) on Thursday afternoon announced cuts in its global smelting operations and a restructuring charge that likely will force the company to report a fourth-quarter loss, and after-hours trading knocked the stock down 2% by Friday morning.
Alcoa said sinking aluminum prices have forced the company to reduce smelting capacity by 12% — it will close operations in Alcoa, Tenn., and Rockdale, Texas, to reduce capacity by 7%, though specifics about the other 5% were not released. Aluminum prices have fallen more than 27% from their peak in 2011.
Alcoa also will eat restructuring charges in Q4 of $155 million to $165 million, or 15 cents to 16 cents per share. Before the report, analysts surveyed by Thomson Reuters I/B/E/S had predicted earnings of just 1 cent per share; Alcoa now is likely to take a loss for the quarter, which would be its first in nine quarters.
�These are difficult but necessary steps to improve Alcoa�s competitiveness, preserve and grow shareholder value and protect jobs in the rest of the Alcoa system,� Alcoa Chairman and CEO Klaus Kleinfeld said in a press release.
Heading into Friday, Alcoa was trading at $9.36, up more than 8% since the start of 2012 but still down about 40% in the past 52 weeks.
Read more about Alcoa’s reductions in smelting operations and weak aluminum prices on Fox Business, via Reuters.
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