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.
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.