Alcoa (NYSE:AA) on Thursday afternoon announced cuts in its global smelting operations and a restructuring charge that likely will force the company to report a fourth-quarter loss, and after-hours trading knocked the stock down 2% by Friday morning.
Alcoa said sinking aluminum prices have forced the company to reduce smelting capacity by 12% — it will close operations in Alcoa, Tenn., and Rockdale, Texas, to reduce capacity by 7%, though specifics about the other 5% were not released. Aluminum prices have fallen more than 27% from their peak in 2011.
Alcoa also will eat restructuring charges in Q4 of $155 million to $165 million, or 15 cents to 16 cents per share. Before the report, analysts surveyed by Thomson Reuters I/B/E/S had predicted earnings of just 1 cent per share; Alcoa now is likely to take a loss for the quarter, which would be its first in nine quarters.
“These are difficult but necessary steps to improve Alcoa’s competitiveness, preserve and grow shareholder value and protect jobs in the rest of the Alcoa system,” Alcoa Chairman and CEO Klaus Kleinfeld said in a press release.
Heading into Friday, Alcoa was trading at $9.36, up more than 8% since the start of 2012 but still down about 40% in the past 52 weeks.
Read more about Alcoa’s reductions in smelting operations and weak aluminum prices on Fox Business, via Reuters.