NEW YORK Special items and one-time charges pushed Alcoa Inc. into the red in the second quarter, even as the aluminum producer reported strong end-use demand and productivity gains across all business segments.
Pittsburgh-based Alcoa, traditionally the first metals company to release quarterly results, posted a net loss of $119 million for the three months ended June 30, up from a $2-million loss in the same period last year, on sales that slipped 1.9 percent to $5.85 billion from $5.96 million. The company had posted net income of $149 million on sales of $5.83 billion in the first three months of this year.
The company attributed its return to red ink to charges related to "restructuring and a legacy legal matter." Included in the restructuring costs were a $42-million charge related to the closing of the two Soderberg potlines at its Baie-Comeau smelter in Quebec; a $34-million charge related to its decision to permanently close its Fusina smelter in Italy; and a $37-million charge related to broader restructuring across all business segments, including asset retirements of previously idled facilities. The company also recorded a $62-million charge related to the governments ongoing corruption investigation into sales of alumina to Aluminium Bahrain BSC (Alba).
Despite the red ink, Alcoa chairman and chief executive officer Klaus Kleinfeld called the companys operating performance "remarkable," citing an increased focus on value-added products and a shift away from commodity-grade aluminum, which is more impacted by the plummeting price of the metal.
"We are building out our value-added businesses. Fifty-seven percent of total revenue is already coming from the valued-added business and making up 80 percent of the profit," he told CNBC following the release of Alcoas results.