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
Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
