logo  
Sign in or Register

Already a member?

Sign in

Or sign in with your account on:

Not a member yet?

Register
    

Alcoa's (AA) Disappointing Earnings, Factory Expansion Cloud Guilty Plea to Bribery Charges

By  +Follow January 14, 2014 6:38AM
Share:
Tickers Mentioned:

With the early Tuesday announcement of a $300 million expansion of its Davenport, Iowa factory, shares for the $10 billion aluminum giant Alcoa Inc. (AA) got a much-needed lift of just over 2 percent early on in the day’s trading session.

Auto Manufacturers Spurr Aluminum Demand

The announcement was made at the North American International Auto Show in Detroit, Michigan, and is positive news for a company that struggled under the weight of an uncertain global economy for a great deal of 2013. Automobile manufacturers have increasingly been turning to aluminum as “a cost-effective way to improve the performance, safety, durability and fuel efficiency of their vehicles,” according to Alcoa CEO Klaus Kleinfeld, who added that the Davenport upgrade would be the first of three such investments that the company will be making to meet growing demand.

And demand is indeed growing. The automobile industry expects its use of aluminum to increase drastically over the long-term, but the trend is already well underway; by next year, the amount of the metal used in car bodies will quadruple from 2012 levels.

Earnings Disappointment

The news also provides a modest palliative for the fourth quarter and full-year 2013 earnings reports the company released on Friday, Jan 10, that showed revenue off by over 5 percent on a year-over-year basis, with earnings-per-share in the negative by $2.19 on an unadjusted basis, and still shy of analyst expectations when excluding one-time items.

The timing of the previous week’s earnings release was inopportune for the company that appeared to be rallying off of an anemic this past October. All said and done, Alcoa added over 18 percent in 2013, largely thanks to the late-year recuperation, but lost nearly 6 percent last Friday after revealing its balance sheet, sending the stock into negative-performance territory for 2014.

Corruption in the Bahraini Petro-Monarchy

Still, an underwhelming balance sheet can have its uses, and this is particularly so for Alcoa. The company’s reporting is widely, if unofficially, viewed as the signal that earnings season has arrived. Furthermore, given its domestic and global business and clientele, many see its financial performance as a useful gauge of economic conditions.

Indeed, Alcoa’s report last Friday garnered far more attention than an announcement on the same day one of its subsidiaries, Alcoa World Alumina, had agreed to pay $384 million over bribery charges in Bahrain, charges to which it plead guilty.

According to a Jan 10 article from the Financial Times, Victor Dahdaleh, a British-Canadian representative of the firm who just last month managed to avoid a criminal conviction the UK, was involved paying bribes to an advisor to Bahrain’s “Prime Minister”, as well as other members of the gulf nation’s “royal family”.

Settlement

The murky deal involved a 2004 agreement that solidified a long-term distribution deal with Bahrain’s state-controlled aluminum manufacturer Alba. Offshore bank accounts in various countries were used to cover up kickback payments to Bahraini officials and businessmen, and the whole scheme was premised on the ability to artificially markup the price of aluminum by some $188 million from 2005 to 2009.

The Alcoa World Alumina joint-venture with Alba will pay $223 million in fines and penalties over the next four years in order to settle the charges, and an addition $161 million to settle civil charges brought by the Securities and Exchange Commission for various records-keeping and bribery violations.

By midday, shares for Alcoa were up by about 1.66 percent to $10.26 a piece.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Liked What You Read? Join Equities.com as a contributor and get eyeballs on your content FOR FREE!

Results for AA
Stockaholics
27 Jan 15 20:07:51
Our Penny Stock Alert On $QLTS Has Gained 34.62% In The Past 2 Days! Special Update: http://t.co/MNFk4FhSe1 $AA $BRSS $SHOO
Gavin Martinsson
27 Jan 15 19:06:01
Buy $AA then “@MarketWatch: ‘Boring’ stocks generate better returns, study says: http://t.co/0xRSxtxaVl http://t.co/rDdzVo742a”
Rosner Stocks
27 Jan 15 18:46:33
$AA Financials Updated Tuesday, January 27, 2015 8:59:26 PM $INTC $TQQQ $MU $INTC http://t.co/Dm5f1ulcAQ
Paul Medica
27 Jan 15 18:42:39
I can't WAIT for the market to open tomorrow! Goooo $AAPL $AA and everything else I'm long
Langan Stocks
27 Jan 15 18:39:17
$AA Company Info Updated Tuesday, January 27, 2015 9:03:25 PM $CSCO $UUP $WYNN $MCD http://t.co/zzchgMnd0J
Wall Street
27 Jan 15 18:11:47
Why trade alone? Get real time trade alerts from 5 pro traders at http://t.co/iQWRYqnOQl $AVP $ABEV $BMY $AA
IH News Desk
27 Jan 15 17:49:37
$XOM Short Sales Updated Tuesday, January 27, 2015 8:11:23 PM $EEM $EWT $AA $TAN http://t.co/i4BT2iRDzw
Penny Stock Secret
27 Jan 15 17:35:06
This Guy Turned $100 into over $10,000 In Just 30 Days! http://t.co/vezCDY95do .. $A $AA $AA-B
luckypete
27 Jan 15 17:07:45
RT @SAlphaTrending: Alcoa: A Textbook Example That Contrarian Investment Strategies Can Be Hugely Profitable http://t.co/pC2b7Mq2ds $AA
PolgarStocks
27 Jan 15 16:46:09
$PXYN Stock Price Updated Tuesday, January 27, 2015 7:07:24 PM $WYNN $IWM $CAT $AA http://t.co/nxwRgi0Uc5
Rosner Stocks
27 Jan 15 16:46:07
$FEYE Investor Opinions Updated Tuesday, January 27, 2015 6:59:26 PM $AA $GFI $BBRY $MCD http://t.co/2skK94efg1
Langan Stocks
27 Jan 15 16:37:39
$BEBE Percent Change Updated Tuesday, January 27, 2015 7:03:25 PM $XLU $PG $BX $AA http://t.co/TohYMlJbiG
iHangout
27 Jan 15 16:04:17
chartguy89: 2015 Trending Stocks: AA -1.00% Stock Charts $AA Alcoa Inc. (NYSE) Last http://t.co/Qr3DICjg8M
HotKeyTrading
27 Jan 15 16:00:08
Stock Picks: Sector Leaders: $TK $AA $CENX $AMAG $FDX $BBBY $CF $F $NKE $BRCD $NI $BHE $HOS $ORCL $SHPG $FINL $INTC $NLY $AAPL $SYMC $LM
chartguy89
27 Jan 15 15:55:45
AA -1.00% Stock Charts $AA Alcoa Inc. (NYSE) Last Updated: 01/27/2015 17:55:55 AA Stock Chart - 1 Month http:/ http://t.co/GyUgTUgj8y
FinSentS SP500
27 Jan 15 15:49:01
$AA:US Alcoa: A Textbook Example That Contrarian Investment Strategies Can Be Hugely Profitable #ALCOA INC http://t.co/J9qtqi1qip #SP500
Rosner Stocks
27 Jan 15 15:45:06
$AA Investor Opinions Updated Tuesday, January 27, 2015 5:59:25 PM $XLV $GRCU $MCD $CPRX http://t.co/F310NgY603
Stock Signaling
27 Jan 15 15:31:34
Upgraded Stocks Active After Hours: $AAPL $LULU $TRP $CALM $AMAT $AA $GORO $VALE $CHK $BAC $AEO $PAGP $PGH $KGC $SONC http://t.co/S9oPUZ8PN3
Stockaholics
27 Jan 15 15:31:16
Our Penny Stock Picks Gained 968% In 5 Weeks! Get Our Next Pick Early: http://t.co/yQwzgQ7fmA $AA $BRSS $SHOO
Trending Articles SA
27 Jan 15 15:30:02
Alcoa: A Textbook Example That Contrarian Investment Strategies Can Be Hugely Profitable http://t.co/pC2b7Mq2ds $AA
Finance/Econ News
27 Jan 15 15:19:37
RT @SeekingAlpha: Alcoa: A Textbook Example That Contrarian Investment Strategies Can Be Hugely Profitable http://t.co/rcIavEdLn3 $AA
jlpgbs
27 Jan 15 15:03:14
RT @SeekingAlpha: Alcoa: A Textbook Example That Contrarian Investment Strategies Can Be Hugely Profitable http://t.co/rcIavEdLn3 $AA
StockNewsWires
27 Jan 15 14:51:04
$AA: Alcoa: A Textbook Example That Contrarian Investment Strategies ...: http://t.co/NDj8QGkvYD
Quantpost Basic Mats
27 Jan 15 14:46:40
$AA News: "Alcoa: A Textbook Example That Contrarian Investment Strategies Can…" http://t.co/syyhBLdNm7 Board view: https://t.co/TyE8veaT4M
Seeking Alpha
27 Jan 15 14:46:39
Alcoa: A Textbook Example That Contrarian Investment Strategies Can Be Hugely Profitable http://t.co/rcIavEdLn3 $AA
Rosner Stocks
27 Jan 15 14:44:08
$AMD Percent Change Updated Tuesday, January 27, 2015 4:59:24 PM $AA $UUP $CELG $FXE http://t.co/DztvhxlaLy
Ferengi On Finance
27 Jan 15 14:30:16
Tweeting activity for after hours trading: 47 $AAPL 14 $YHOO 11 $AA 5 $STCC 5 $MSFT 4 $CLF 959 tweets consumed.
PolgarStocks
27 Jan 15 13:43:10
$AA Stock Message Board Updated Tuesday, January 27, 2015 4:07:25 PM $PCLN $UGAZ $AUY $T http://t.co/eBmwBdVxjt
Leonel Álvarez
27 Jan 15 13:10:18
Posiciones dentro: $AA +2.34% $CIG +46.03% $INTC +5.43% $XLU +14.67% $S +5.19% $F +13.74% $RSX -38.03% $JCP -31.50%
Daily Contracts
27 Jan 15 12:45:01
Real-Time feed of company contracts, original agreements and executive updates from Alcoa $AA http://t.co/91cLeoxnfX
Future Tech Investor
27 Jan 15 12:40:21
$KTOS updatd chart $TSLA $WFC $AA $BA $S $F $GM $DIS $CMG $HD $AAPL $AAL $RAD $HPQ $FB $LMT $GS $HPQ $GG $AU $NEM $MU http://t.co/FwLhO0hHWY
Wall Street
27 Jan 15 11:53:41
http://t.co/iQWRYqnOQl....Top penny stocks, NYSE, and NASDAQ trades from the stock market today. +296% last week. $AA $KO $BSX $AVNR
Rosner Stocks
27 Jan 15 11:40:41
$AA Percent Change Updated Tuesday, January 27, 2015 1:59:24 PM $FXB $RSX $UNH $IWC http://t.co/4mCiq3LT26
Future Tech Investor
27 Jan 15 11:38:12
$SSRI blastin off $NEM $GG $SLW $AU $TSLA $WFC $AA $S $F $GM $DIS $CMG $GILD $AAPL $AAL $Z $LNG $DDD $RAD $HPQ $FB $BA $BAC $BOX $SSYS $TWTR
PolgarStocks
27 Jan 15 10:40:17
$MRK Short Sales Updated Tuesday, January 27, 2015 1:07:26 PM $QLD $AA $SMH $PBR http://t.co/o9clWAc1Uu
PolgarStocks
27 Jan 15 09:40:18
$NEM Investor Opinions Updated Tuesday, January 27, 2015 12:07:28 PM $IEF $EWY $AA $IWC http://t.co/s2DLo6pGI4
Mark Trader
27 Jan 15 09:29:55
I banked over 200% in gains during my 14-day trial with http://t.co/6cvEHBeuNR. Their 5 guru traders are amazing. $AA $KO $BSX $AVNR
ProVesting
27 Jan 15 09:01:04
$AA $FOXA: Market Alert: Alcoa Inc. (NYSE:AA), Twenty-First Century Fox ...: http://t.co/dOvpisUZf0
IH News Desk
27 Jan 15 08:42:13
$IWC Reviews Updated Tuesday, January 27, 2015 11:11:23 AM $NNVC $EWH $AA $DIA http://t.co/NwM63P3mCP
Penny Stock Secret
27 Jan 15 08:38:05
This Guy Turned $100 into over $10,000 In Just 30 Days! http://t.co/vezCDY95do .. $AA $BRSS $SHOO
Wall Street
27 Jan 15 08:18:00
http://t.co/iQWRYqnOQl....Top penny stocks, NYSE, and NASDAQ trades from the stock market today. +296% last week. $AA $KO $BSX $AVNR
Wall Street
27 Jan 15 08:03:52
Why trade alone? Get real time trade alerts from 5 pro traders at http://t.co/iQWRYqnOQl $AA $KO $BSX $AVNR
Harry Rivera
27 Jan 15 07:36:34
RT @CBOE: Actives on open @ CBOE: $AAPL $AMZN $MSFT $TWTR $TSLA $GILD $NFLX $C $AA $HPQ $X
InterCooler
27 Jan 15 07:35:38
JPMorgan Chase & Co. Cuts Alcoa Price Target to $20.00 $AA http://t.co/yhgfMldGJO
CBOE
27 Jan 15 07:24:40
Actives on open @ CBOE: $AAPL $AMZN $MSFT $TWTR $TSLA $GILD $NFLX $C $AA $HPQ $X
Steve Mahoney Ⓜ️#SM
27 Jan 15 07:10:23
@DeidreZune Don't invest in Airlines but I did have an Enjoyable Experience with #AA flying to @aruba on a Family Vacation - ;) $AA
Leonel Álvarez
27 Jan 15 06:59:11
$AA+1.89% $CIG +48.51% $INTC +5.65% $AAPL +1.17% $FB +.02% $XLU +14.81% $QQQ +.23% $S +4.71% $SPY +.32% $F +13.80% $RSX -39.15% $JCP -32.03%
joubertfrance63
27 Jan 15 06:48:47
☑️ #FOLLOWTRICK ✅ RETWEET ☑️ FOLLOW ALL WHO RT ✅ FOLLOWBACK ☑️ GAIN WITH ME ✅ #FOLLOW #ANDROID #Love #sexylist2014 #ff $å/c
bzeaudetttpooba
27 Jan 15 06:47:38
༺☾➊☽༻ RETWEET ༺☾➋☽༻ FOLLOW ALL WHO RT ༺☾➌☽༻ FOLLOWBACK ༺☾➍☽༻ GAIN WITH ME RT NOW༺☾➎☽༻ #ONEDIRECTION #Love #FOLLOWBACK $å-d
ProVesting
27 Jan 15 06:41:03
$AA: Alcoa Inc Witness Large Outflow of Money: http://t.co/MYuXKH7X71
				
				
By  +Follow January 14, 2014 6:38AM
Share:

Comments

 

blog comments powered by Disqus

About us

Equities.com is the most advanced interactive online social ecosystem for the financial industry, serving as a resource center and next-generation communication platform that connects self-directed investors with public issuers, market experts, and professional service providers and vendors. Registered members can leverage our exclusive proprietary research tools such as the Small-Cap Stars, which outperformed 90% of all small-cap mutual funds, and robust do-it-yourself E.V.A. research reports. The Equities.com Issuer Dashboard is the ideal tool to communicate and manage investor awareness campaigns to the investment community, as well as to access valuable resources to help your company grow.

Market Data powered by QuoteMedia.
Copyright © QuoteMedia. Data delayed 15 minutes unless otherwise indicated. Terms of Use.