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
TV_Trading Ideas
18 Dec 14 11:00:50
Put sale $AA http://t.co/sfgfNJHCTY
Jerremy Newsome
18 Dec 14 11:00:50
$AA chart: Put sale . http://t.co/NSdIPvtgQK
John H Armstrong
18 Dec 14 10:26:07
RT @v2ratingsbot: $AA looks overpriced (rated 4.0 as price is up to 15.66). Price vs ratings chart: http://t.co/9sqndNAjTD
Investors Hangout
18 Dec 14 10:08:06
danrocks: $AA alot of talk going around about this one http://t.co/VfxzgO8hTD
Mehrdad Ketabchi
18 Dec 14 10:04:09
Sold $aa
Dave Neville
18 Dec 14 10:03:35
$AA up 4.19%
Analyst Ratings
18 Dec 14 10:02:17
Alcoa Inc. Receives a Buy from Deutsche Bank $AA http://t.co/mR19vvB734
danrocks
18 Dec 14 09:59:05
$AA alot of talk going around about this one $EBAY $BTE.TO $PWE $GRPN $RAD http://t.co/Ej1XOyvk01
v2 Ratings Bot
18 Dec 14 09:54:05
$AA looks overpriced (rated 4.0 as price is up to 15.66). Price vs ratings chart: http://t.co/9sqndNAjTD
Investors Hangout
18 Dec 14 09:53:08
DennyT: XLF Insider Roster $XLF $YPF $RSX $AA $XLF Buy or http://t.co/eYIgCYCqw4
Lee Renrut
18 Dec 14 09:52:39
RT @HitTheBidRadio: $AA for you true believers http://t.co/LZmpjbMHKg
Hit The Bid Radio
18 Dec 14 09:52:14
$AA for you true believers http://t.co/LZmpjbMHKg
iHangout
18 Dec 14 09:34:36
DennyT: The Hunt for the Next 10 Bagger: XLF Insider Roster $XLF $YPF $RSX $AA $XLF Buy or http://t.co/LaajLjiqXK
DennyT
18 Dec 14 09:31:18
XLF Insider Roster $XLF $YPF $RSX $AA $XLF Buy or Sell?,50 Simple Moving Average,Current Price,Headlines,Hitti http://t.co/AdTZgCD2HF
Stockaholics
18 Dec 14 09:07:12
Platinum Memberships Rose, After 528% Gains On Penny Stocks, In One Month! Big Update: http://t.co/2W3yKD2d5Q $AA $BRSS $SHOO
Investors Hangout
18 Dec 14 09:06:18
danrocks: $IVV On Radar $ARWR $BIDU $XLB $AA $SBUX http://t.co/OekihaPBy5
Investors Hangout
18 Dec 14 09:06:13
danrocks: $IVV On Radar $ARWR $BIDU $XLB $AA $SBUX http://t.co/EOz8IY4ESr
iHangout
18 Dec 14 09:02:07
danrocks: The Hunt for the Next 10 Bagger: $IVV On Radar $ARWR $BIDU $XLB $AA $SBUX http://t.co/ra2bs1eRd1
lookn4wins
18 Dec 14 09:01:57
$UNG Volume $UNG Most recent stock chart and technical analysis. $TBT $DGLY $BP $PBR $AA $ZIOP http://stockcha http://t.co/RcF8jnjzjL
danrocks
18 Dec 14 08:58:12
$IVV On Radar $ARWR $BIDU $XLB $AA $SBUX http://t.co/VOUDP15YXH
Princeton Research
18 Dec 14 08:46:31
Investing Trade Alerts Sold $AA 1/15 calls @ $1.03 on 1.02 ob order Gain = $140 2014 Returns 187% 4 FREE Alerts GoTo http://t.co/6OWajS8c1P
Charlie Weeks
18 Dec 14 08:31:23
Technical indicator (Stochastic Relative Strength Index) signaled a Overbought for $AA at $15.45 #stockmarket - http://t.co/jrE5pP5WAD
Investors Hangout
18 Dec 14 08:27:17
lookn4wins: $AA Volume $AA Most recent stock chart and http://t.co/3VzYArN2V4
Investors Hangout
18 Dec 14 08:27:10
lookn4wins: $AA Volume $AA Most recent stock chart and http://t.co/gHOOx3W7XE
lookn4wins
18 Dec 14 08:26:30
$AA Volume $AA Most recent stock chart and technical analysis. $ORCL $LNKD $GS $QID $AMGN $RSP http://stockcha http://t.co/QoGtNkuNGw
Stock Wire
18 Dec 14 08:21:21
AA: Alcoa Is Firing Up Its Margins $AA http://t.co/Y49xMBS9G7
leahanne
18 Dec 14 08:18:00
$TLT 20+ Year Trsy Bond Ishares (TLT) 124.43 -2.00 (-1.58%) $AA $VXX $LNKD http://t.co/TAUpTx3mJz
Bashaar
18 Dec 14 08:07:21
Sold $AA on the gap up , will buy it back on the pull back if any , selling my $BABA shares ahead of lockup .
Shena Fagan
18 Dec 14 07:45:42
Great #Pennystock #research $NWL $AA $TUP $YOD #liquidity http://t.co/V54ryHx74k
Louella Ivy
18 Dec 14 07:38:12
Are you hanging on to $OGE $RGA $AA $ISRG Try this http://t.co/yhUzIBtUnl
Penny Stocks Blog
18 Dec 14 07:33:52
RT @mediasentiment: $AA received a new alert. See why at http://t.co/5lwmDm2SCs #stocks #markets #daytrading 4
Andrew Labutka
18 Dec 14 07:32:41
RT @SeekingAlpha: Alcoa: Enough Selling Already http://t.co/Wh7eZphitP $AA
Shawn Hager
18 Dec 14 07:32:40
Get Free research on $PAY $AA $BMRN $CI I suggest http://t.co/vR9dS81Twz
JustinLawson
18 Dec 14 07:15:16
RT @OneChicago: $AA 20150116 Block Trade: 1098 trade. ~$1.7 MM notional value.
OneChicago
18 Dec 14 07:14:01
$AA 20150116 Block Trade: 1098 trade. ~$1.7 MM notional value.
lookn4wins
18 Dec 14 07:08:15
$XLF Candlesticks $XLF Most recent stock chart and technical analysis. $KO $SPXU $LUV $AA $NEM $PLUG http://st http://t.co/DedzJGVsNm
NJ Capital Investing
18 Dec 14 07:06:36
I love profits $BABA $INO $ETN $AA http://t.co/48GZF2I4hB
OneChicago
18 Dec 14 07:01:02
$AA 20150116 Block Trade: 135 trade. ~$0.2 MM notional value.
Dakota Financial
18 Dec 14 06:57:12
Traders Sell Alcoa on Strength $AA http://t.co/Qc8cdp8dIl
OneChicago
18 Dec 14 06:57:01
$AA 20150116 Block Trade: 331 trade. ~$0.5 MM notional value.
Future Tech Investor
18 Dec 14 06:54:31
$MXWL setup for spike $TSLA $KNDI $NFLX $BAC $LOCO $AMZN $HPQ $WFC $AAL $AA $FLEX $SUNE $TWTR $FB $MU $TXN $ZU $CMG $BABA $GPRO $LNG $NVAX
TV_Trading Ideas
18 Dec 14 06:38:05
Alcoa is due for a 15% increase $AA http://t.co/SVyiOAzj2l
Media Sentiment
18 Dec 14 06:20:33
$AA received a new alert. See why at http://t.co/5lwmDm2SCs #stocks #markets #daytrading 4
Stock Wire
18 Dec 14 06:19:09
Alcoa Inc (NYSE:AA) Should Beat Expectations Says Stifel $AA http://t.co/D5qkTUbL9W
Daily Contracts
18 Dec 14 06:13:01
Real-Time feed of company contracts, original agreements and executive updates from Alcoa $AA http://t.co/91cLeoxnfX
Options/stocks Gains
18 Dec 14 06:03:06
“@Taarriqq:Our scan caught tons of double bottom bullish pattern, big $PCLN $AA $DOW $MLM $VLO $GRUB @ChartsExpert http://t.co/44glzsiKct
IVolatility
18 Dec 14 06:01:57
Alcoa $AA implied volatility of 48 at upper end of index mean range
LV Phantom Man
18 Dec 14 05:20:26
@jimcramer liking $AA here? Looks like a great opportunity.
Calendar Options
18 Dec 14 04:49:51
$AA if 14 holds into jan, will go long options trade into earnings http://t.co/DzdsoBXQ6N
Market Newswire
18 Dec 14 04:45:53
Why Alcoa (AA) Could Beat Earnings Estimates Again - December 18, 2014 - http://t.co/CcuKTOaseh $AA #stocks #markets #mkt
				
				
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.