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Alcoa Reported a Fall in Income Quarter-over-Quarter

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Oct. 9 2015, Published 12:03 p.m. ET

Alcoa’s price movement

Alcoa (AA) has a market cap of $14.4 billion. Its YTD (year-to-date) price movement is falling day by day. Alcoa’s income has fallen every quarter. After the earnings report in 3Q15, Alcoa rose by 0.6% to close at $11.01 per share as of October 8, 2015. The price movement on a weekly, monthly, and YTD basis is 18.9%, 15.1% and -29.8%, respectively. It’s trading at 15.7% on a trailing five-day basis.

At times, it has broken the support of the 20-day, 50-day, and 200-day moving averages in 2015. It’s trading at 13.1% above the 20-day moving average, 15.8% above the 50-day moving average, and -11.9% below the 200-day moving average.

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The SPDR S&P Metals and Mining ETF (XME) invests 3.7% of its holdings in Alcoa. XME tracks an equal-weighted index of US metals and mining companies. It holds firms classified as operating in the Metals and Mining sector by GICS. This includes coal firms. XME’s YTD price movement was -37.6% as of October 7, 2015. The iShares MSCI Global Select Metals & Mining Producers (PICK) invests 2.8% of its holdings in Alcoa.

Alcoa’s competitors and their market caps are:

  • Anheuser-Busch Inbev SA-ADR (BUD) – $173.3 billion
  • BHP Billiton Plc (BBL) – $94.9 billion
  • Aluminum Corp. of China Limited (ACH) – $10 billion
  • Kaiser Aluminum (KALU) – $1.5 billion

Performance of Alcoa in 3Q15

The company reported net revenue of $5,573 million in 3Q15—a fall of 5.5% compared to net revenue of $5,897 million in 2Q15. The gross profit and EPS (earnings per share) fell to $1,014 million and $0.02 per share—a fall of 17.8% and 80% on a quarterly basis. The cash and cash equivalents and current ratio rose to $1,739 million and 1.7 in 3Q15—a rise of 10.7% and 32.6% on a quarterly basis. The debt-to-equity ratio remained the same in 2Q15 and 3Q15 as 1.5.

In 3Q15, some of Alcoa’s key activities are:

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  • The company approved a quarterly common stock dividend of $0.03 per share.
  • The company completed the acquisition of RTI International Metals (RTI)—a leader in titanium and specialty metal products and services for the aerospace, defense, energy, and medical device markets.
  • The company expanded its R&D (research and development) center in Pennsylvania to accelerate the development of advanced 3D printing materials and processes.
  • Alcoa completed an expansion at its Tennessee facility to supply aluminum sheets in the automotive industry.
  • The company approved a plan to separate into two independent and publicly traded companies. This culminated Alcoa’s successful multi-year transformation.

About Alcoa

Alcoa focuses on lightweight metals technology, engineering, and manufacturing. It enables smart buildings, sustainable food and beverage packaging, high-performance defense vehicles across air, land, and sea, deeper oil and gas drilling, and more efficient power generation.

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