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Here’s Why Alcoa’s Stock Keeps Soaring
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Here’s Why Alcoa’s Stock Keeps Soaring

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Shares of Alcoa soared yesterday, here’s why.

Shares of Alcoa soared yesterday, here’s why.

Published in Business , Economy & Finance
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  • http://seekingalpha.com/article/2299675-3-large-u-s-corporations-set-to-publish-earnings-the-week-of-july-the-7th
    And https://www.alcoa.com/global/en/news/image_library/overview.asp?cat_id=200
  • http://seekingalpha.com/article/2299675-3-large-u-s-corporations-set-to-publish-earnings-the-week-of-july-the-7th
    And https://www.alcoa.com/global/en/news/image_library/overview.asp?cat_id=200
  • https://www.alcoa.com/global/en/investment/pdfs/2014_2Q_Earnings_Press_Release.pdf
  • https://www.alcoa.com/global/en/investment/pdfs/2014_2Q_Earnings_Press_Release.pdf
  • https://www.alcoa.com/global/en/investment/pdfs/2014_2Q_Earnings_Presentation.pdf
  • https://www.alcoa.com/global/en/investment/pdfs/2014_2Q_Earnings_Press_Release.pdf
  • https://www.alcoa.com/global/en/investment/pdfs/2014_2Q_Earnings_Presentation.pdf
  • https://www.alcoa.com/global/en/investment/pdfs/2014_2Q_Earnings_Press_Release.pdf

Transcript

  • 1. Here’s Why Alcoa’s Stock Keeps Soaring
  • 2. Alcoa (NYSE: AA) • Going into the report Alcoa was expected to report earnings of $0.12 per share, up from $0.07 per share in last year’s second quarter. • Revenue, meanwhile was expected to drop 3.3% year- over-year to $5.66 billion. Alcoa reported strong second quarter results after markets closed on July 8th.
  • 3. Alcoa (NYSE: AA) • Alcoa reported earnings per share, excluding special items, of $0.18. That’s $0.06 per share above or 50% higher than estimates. • Stronger than expected revenue of $5.8 billion was a contributor to the earnings beat as revenue stayed flat over last year as opposed to slumping 3.3% as analysts were expecting. Alcoa easily beat both numbers as the company delivered strong second quarter results.
  • 4. Alcoa (NYSE: AA) • Engineered Products and Solutions delivered its highest after-tax-operating income in history thanks to record adjusted EBITDA margin of 23.1% • Meanwhile, Global Rolled Products after-tax-operating income was up 34% over just last quarter. • Finally, Alcoa’s upstream revenue improved for the 11th straight quarter. All three of Alcoa’s business segments delivered strong results.
  • 5. Alcoa (NYSE: AA) • Positive free cash flow of $260 million. • Net debt is down to $6.9 billion, which is the lowest since September of 2007. • Debt-to-Capital ratio of 35.4% is closing in on its target range of 30%-35%. • This has the company on target to meets its 2014 goals. This produced positive free cash flow, which improved Alcoa’s balance sheet.
  • 6. Alcoa (NYSE: AA) • Positive free cash flow of $260 million. • Net debt is down to $6.9 billion, which is the lowest since September of 2007. • Debt-to-Capital ratio of 35.4% is closing in on its target range of 30%-35%. This produced positive free cash flow, which improved Alcoa’s balance sheet. Source: Alcoa Investor Presentation
  • 7. Alcoa (NYSE: AA) • Company announced the $2.85 billion acquisition of Firth Rixon, which will strengthen its aerospace offerings. • Alcoa is also investing $125 million to expand its advance jet engine component offerings. • Company now has curtailed 147,000 metric tons of smelting capacity in Brazil. Looking ahead Alcoa continues to accelerate the transformation of its portfolio.
  • 8. Alcoa (NYSE: AA) • Positive free cash flow of $260 million. • Net debt is down to $6.9 billion, which is the lowest since September of 2007. • Debt-to-Capital ratio of 35.4% is closing in on its target range of 30%-35%. This produced positive free cash flow, which improved Alcoa’s balance sheet. Source: Alcoa Investor Presentation
  • 9. Alcoa (NYSE: AA) • Company on pace for $1.8 billion in organic value-add revenue in 2016. • Firth Rixson to add $1.6 billion in revenue and $350 million in EBITDA in 2016. • Investments in advanced jet engine components to grow that segment’s revenue to $2.2 billion by 2016. This has the company set up for continued growth.
  • 10. Investor takeaway Alcoa’s transformation continues to pick up steam. The company is growing its higher margin value-add segments while also creating a more competitive commodity business. It’s a move that should fuel Alcoa’s stock to continue soaring higher. Source: Alcoa Investor Presentation
  • 11. Our FREE report on top dividend stocks.