Alcoa Inc. (NYSE: AA) was down in the market on Monday on news of an alumina curtailment. The company announced the curtailment of Suralco’s remaining 887,000 metric tons per year of alumina refining capacity as discussions continue with the government of Suriname on preserving the country’s bauxite and refining industry.
The refinery is scheduled to be idled by November 30, 2015. The curtailment and ongoing discussions are aligned with Alcoa’s strategy to create a globally competitive commodity business.
Total restructuring-related charges in the second half of 2015 associated with the curtailment are expected to be in the area of $65 million to $75 million after-tax and non-controlling interest. This breaks down to an impact on earnings of $0.05 to $0.06 per share, of which roughly 50% would be recorded in the third quarter. About 80% of the charges are non-cash.
The curtailment follows Alcoa’s March 2015 announcement to evaluate 2.8 million metric tons of refining capacity for possible curtailment or divestiture.
Bob Wilt, President of Alcoa Global Primary Products, said:
Suralco’s ongoing energy challenges and limited bauxite supply, combined with unfavorable market conditions, mean it is no longer possible to continue operations. Our immediate attention now turns to the employees of Suralco who have worked hard during these challenging times. We understand how difficult this decision is for employees and we will work closely with them and our unions, government and community stakeholders during the transition.
Recently a few analysts weighed in on Alcoa:
- Merrill Lynch upgraded the company to a Buy rating from Neutral but lowered the price target to $12 from $13.
- Deutsche Bank reiterated a Buy rating and a $16 price target.
- Argus reiterated a Buy rating and lowered its price to $16 from $20.
Shares of Alcoa were down 2.1% at $9.44 on Monday. The stock has a consensus analyst price target of $13.54 and a 52-week trading range of $7.97 to $17.75.
ALSO READ: 10 States Burning the Most Coal
It’s Your Money, Your Future—Own It (sponsor)
Retirement can be daunting, but it doesn’t need to be.
Imagine having an expert in your corner to help you with your financial goals. Someone to help you determine if you’re ahead, behind, or right on track. With SmartAsset, that’s not just a dream—it’s reality. This free tool connects you with pre-screened financial advisors who work in your best interests. It’s quick, it’s easy, so take the leap today and start planning smarter!
Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.