Alcoa plans up to $1B in asset sales amid growth fears

FAN Editor

Alcoa plans to sell up to $1 billion in assets and may close facilities over the next few years as it grapples with slowing economic growth that has driven aluminum prices lower, damaging its financial performance.

Continue Reading Below

The Pittsburgh-based manufacturer said Wednesday it has launched a review of the company meant to cut expenses and point it toward sustainable profits.

The company said it would try to sell what it called noncore assets over the next year to 18 months, bringing in between $500 million and $1 billion in proceeds.

Ticker Security Last Change Change %
AA ALCOA CORPORATION 19.16 -0.30 -1.54%

Shares of Alcoa rose 6 percent in after-hours trading but have fallen 28 percent so far this year through Wednesday.

GET FOX BUSINESS ON THE GO BY CLICKING HERE

Over a five-year period, Alcoa plans to consider a range of further asset sales and closures of facilities, as well as curtailing production at other sites. It said it would review 1.5 million metric tons of smelting capacity and 4 million metric tons of alumina-refining capacity.

The company has been hurt by fears that a weaker global economy will cut into demand for its products and crimp prices for metals. On Tuesday, the International Monetary Fund said it expects growth of 3 percent this year, lower than its forecast from July and off close to 1 percentage point compared with 2017.

Global demand for aluminum in 2019 will be weaker than Alcoa previously expected, the company also said Wednesday. The aluminum manufacturer now believes global aluminum demand will rise no more than 0.4 percent this year but may fall as much as 0.6 percent. Earlier, it said it believed demand for the metal would rise between 1.3 percent and 2.3 percent this year.

“The change is driven by weakening macroeconomic conditions, trade tensions between the U.S. and China, and contracting manufacturing activity, especially in the global automotive sector,” the company said in a statement.

Quarterly revenue at Alcoa declined 24 percent from a year earlier to $2.57 billion as aluminum prices declined. Its average selling price of $2,138 a metric ton for aluminum in the latest quarter was down 13 percent compared with the year-ago period.

CLICK HERE TO READ MORE ON FOX BUSINESS

Alcoa reported a quarterly loss of $221 million, or $1.19 a share, wider than the loss of $6 million, or 3 cents a share, the company recorded in the year-ago period. After adjustments, the company reported a loss of 44 cents a share, worse than what analysts polled by FactSet expected.

Free America Network Articles

Leave a Reply

Next Post

80 injured in third night of Catalonia protests; 33 arrested

Spanish authorities say that 80 people, including 46 police officers were injured overnight during the most violent of three nights of rioting over the imprisonment of Catalan separatist leaders. A statement from the office of Spain’s caretaker prime minister says that 33 people have been arrested. Four protesters have been […]

Subscribe US Now