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 and Connect With Your Favorite Financial Experts FOR FREE! Members of Equities.com gain access to our leading financial news and content, active social investment community, proprietary research tools including the 2014 Small-Cap Stars, E.V.A. reports and more.

Results for AA
Stockaholics
28 Nov 14 12:00:45
Our Penny Stock Pick On $STTK Is Up 128.57% In 2 Days! Major Update: http://t.co/oR27rFfh2v $AA $BRSS $SHOO
Dean Hanson
28 Nov 14 11:31:40
$AA $FTR $F #aluminum
PennyStocker
28 Nov 14 11:19:00
Wowser $ELED in breakout mode. Going long on the 8k news. $AVP $ABEV $BMY $AA
Mark Trader
28 Nov 14 10:56:15
http://t.co/FOdvsRfk32 has 6 pro traders in their chat room. real-time trade alerts, and offer a 14-day trial. $FB $EPF $AA $BBD $CLF $FCX
PennyStocker
28 Nov 14 10:48:49
$ELED is breaking out of bullish flag pattern today. Could be a big couple days here. $AVP $ABEV $BMY $AA
Investors Hangout
28 Nov 14 09:50:40
lookn4wins: AA -1.96% Stock Charts $AA Alcoa Inc. (NYSE) Any http://t.co/GuCICzYrhs
$KANDALØ$TØ$
28 Nov 14 09:49:18
Følar meg $å Han$el http://t.co/38AapVQ8HD
lookn4wins
28 Nov 14 09:44:42
AA -1.96% Stock Charts $AA Alcoa Inc. (NYSE) Any opinions on AA? Please reply to this post. Last Updated: 11/2 http://t.co/wn5pwg1UAz
PennyStocker
28 Nov 14 09:41:07
$ELED is breaking out of bullish flag pattern today. Could be a big couple days here. $AVP $ABEV $BMY $AA
CW_McNally
28 Nov 14 09:22:59
Holding thru week end long $LOCK $SBH $ZTS $ABT $KAR $LQ $AA $CDW $SONC $GRPN $SNTA #skininthegame with #stops to keep from getting #skinned
PennyStocker
28 Nov 14 09:19:59
$ELED is breaking out of bullish flag pattern today. Could be a big couple days here. $AA $KO $BSX $AVNR
PennyStocker
28 Nov 14 09:09:00
Wowser $ELED in breakout mode. Going long on the 8k news. $AA $KO $BSX $AVNR
Investors Hangout
28 Nov 14 08:47:08
leahanne: Volume Alert - AA 17.17 Alcoa Inc $AA Hit a high http://t.co/XkPTTUTkyh
Investors Hangout
28 Nov 14 08:47:08
leahanne: Volume Alert - AA 17.17 Alcoa Inc $AA Hit a high http://t.co/AZJ0Z7Lu5q
Investors Hangout
28 Nov 14 08:47:08
leahanne: Volume Alert - AA Stock 17.17 Alcoa Inc $AA Hit a http://t.co/gnJgR3KyEI
Investors Hangout
28 Nov 14 08:47:07
leahanne: Volume Alert - AA Stock 17.17 Alcoa Inc $AA Hit a http://t.co/0o7p1nzgft
iHangout
28 Nov 14 08:45:09
leahanne: ALERTS, HOT STOCKS & CHARTS: Volume Alert - AA 17.17 Alcoa Inc $AA Hit a high http://t.co/r5Vbm39EPJ
iHangout
28 Nov 14 08:45:06
leahanne: $AA Alcoa Inc.: Volume Alert - AA Stock 17.17 Alcoa Inc $AA Hit a http://t.co/QeW0bumML5
leahanne
28 Nov 14 08:43:18
Volume Alert - AA 17.17 Alcoa Inc $AA Hit a high today of 17.59 Closing the day 10:30 at 17.17 -0.43 -2.44% Wi http://t.co/1HRIaiINCd
leahanne
28 Nov 14 08:42:56
$AA Volume Alert - AA Stock 17.17 Alcoa Inc $AA Hit a high today of 17.59 Closing the day 10:30 at 17.17 -0.43 -2. http://t.co/MUW4QijcHs
PennyStocker
28 Nov 14 08:25:38
$ELED is breaking out of bullish flag pattern today. Could be a big couple days here. $AVP $ABEV $BMY $AA
ThinkingProfit.com
28 Nov 14 08:16:19
$AA: 6 open, suited signals indicate continued price increase beyond average holding times. http://t.co/mlDfU0cLV2
PennyStocker
28 Nov 14 08:12:47
Wowser $ELED in breakout mode. Going long on the 8k news. $AVP $ABEV $BMY $AA
Mark Trader
28 Nov 14 08:05:32
I banked over 200% in gains during my 14-day trial with http://t.co/6cvEHBeuNR. Their 5 guru traders are amazing. $AVP $ABEV $BMY $AA
AskLou
28 Nov 14 08:02:13
$STUDY Note $AA conspicuously absent from the commodity selloff today. Why? It never participated in the commodity inflation cycle.
Mark Trader
28 Nov 14 07:37:41
Thanks to the pros at http://t.co/6cvEHBeuNR for the $TINO swing trade idea. Up 45% so far. $AA $KO $BSX $AVNR
Penny Stock Secret
28 Nov 14 06:56:03
Premium Alerts Ranked #1 For Gains 2834% Last Week http://t.co/SVqoMlijqL .. $AA $BRSS $SHOO
Cutlass
28 Nov 14 06:23:30
RT @investorsHQ: $AA - Go Long 2016 Calls Strike 20 , 100%+ Potential Gain Before / By Expiration ...
Harris Market Trends
28 Nov 14 05:56:54
"@HarrisMarketTrends: Stocks for fri 11-28 $BRCM $AA $GPRO $DFS $AMBA $MPWR $SIRO $WWAV"
Harris Market Trends
28 Nov 14 05:55:41
$AA not acting to well in the pre-market pulling it from the watch list
InvestorsHeadquarter
28 Nov 14 05:49:37
$AA - Go Long 2016 Calls Strike 20 , 100%+ Potential Gain Before / By Expiration ...
4-traders.com
28 Nov 14 04:10:20
Alcoa : Assigned Patent http://t.co/IBWF2cjpL3 $AA
HotKeyTrading
28 Nov 14 04:00:05
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
Dave Neville
28 Nov 14 02:58:24
SDM: awarded $59.8m EPC contract for Alcoa Kwinana Plant http://t.co/dkxR3WL8Dx I/alcoa-inc/1579604 $AA
Stockaholics
27 Nov 14 23:11:53
Our Penny Stock Pick On $STTK Is Up 128.57% In 2 Days! Major Update: http://t.co/oR27rFfh2v $AA $BRSS $SHOO
Michael Ruggiero
27 Nov 14 19:50:06
$ACAS know when they might split? Nice flag on $GIL, $AA higher highs, $PBCT looking to bounce $AMC swing? $EROS textbook flag
Stockaholics
27 Nov 14 17:31:44
Our Penny Stock Pick On $STTK Is Up 128.57% In 2 Days! Major Update: http://t.co/oR27rFfh2v $AA $BRSS $SHOO
HotKeyTrading
27 Nov 14 16:00:06
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
Mark Trader
27 Nov 14 15:48:10
http://t.co/FOdvsRfk32 has 6 pro traders in their chat room. real-time trade alerts, and offer a 14-day trial. $FB $EPF $AA $BBD $CLF $FCX
Dave
27 Nov 14 15:26:39
I didnt know the pro members get the opening bell alerts from http://t.co/qY5MPlJPrU 1 day early. $AA $VPOR $ALU $SAN $AMD $ZNGA
Stefano
27 Nov 14 15:22:52
RT @StockSignaling: Upgraded Stocks Trading in a New Range: $AAL $WERN $DWA $BDX $BWS $TERP $UTX $PINC $CPRT $QIHU $BYD $AA $OUTR $DENN $BE…
John Turner
27 Nov 14 15:02:56
$AA 3 Reasons Alcoa Inc. Stock Could Hit New Highs http://t.co/DDw58r6BHl
Media Sentiment
27 Nov 14 14:34:48
$AA received a new alert. Find out why at http://t.co/5lwmDm2SCs #stocks #daytrading #trading #mkt #NYSE #NASDAQ #markets 63
Stock Signaling
27 Nov 14 14:31:40
Upgraded Stocks Trading in a New Range: $AAL $WERN $DWA $BDX $BWS $TERP $UTX $PINC $CPRT $QIHU $BYD $AA $OUTR $DENN $BEAT #watchlist #dow
Kay Kang
27 Nov 14 13:27:47
RT @Financial_Orbit: Today's wrap rolls from #Greece to a peer of $AA, a #gold stock, #Poundland & the #OPECmeeting http://t.co/XX8mkByEEN …
Mark Trader
27 Nov 14 13:19:40
I banked over 200% in gains during my 14-day trial with http://t.co/6cvEHBeuNR. Their 5 guru traders are amazing. $AVP $ABEV $BMY $AA
Stockaholics
27 Nov 14 12:56:42
Our Penny Stock Pick On $STTK Is Up 128.57% In 2 Days! Major Update: http://t.co/oR27rFfh2v $AA $BRSS $SHOO
Hellas
27 Nov 14 12:39:52
RT @Financial_Orbit: Today's wrap rolls from #Greece to a peer of $AA, a #gold stock, #Poundland & the #OPECmeeting http://t.co/XX8mkByEEN …
Jeffrey Blake
27 Nov 14 12:31:47
$AA 3 Reasons Alcoa Inc. Stock Could Hit New Highs http://t.co/4TC3AdZwgc
PennyStocker
27 Nov 14 12:31:18
Wowser $ELED in breakout mode. Going long on the 8k news. $AA $KO $BSX $AVNR
				
				
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.