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Last updated: January 09. 2014 5:37PM - 398 Views
Associated Press



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(AP) Alcoa Inc. reported a $2.34 billion fourth-quarter loss as it wrote down the value of years-old aluminum-smelting acquisitions to shift its focus to more profitable businesses.


An adjusted measure of profit fell short of Wall Street expectations as revenue fell 5 percent to $5.59 billion.


Shares slid 3.7 percent to $10.30 in aftermarket trading.


Alcoa is struggling with stubbornly weak aluminum prices in the quarter, the company was paid an average of 7 percent less for the metal than it received in the same period a year earlier. The company is hoping that demand for aluminum in airplanes and autos will help boost prices. It predicted that overall demand would grow 7 percent this year, the same as in 2013.


Alcoa has idled one-sixth of its smelting capacity. It sees a brighter future in its segments that produce rolled aluminum and engineered products, which accounted for 57 percent of company revenue in 2013.


In the fourth quarter, the company's loss equaled $2.19 per share. A year earlier, the company earned $242 million, or 21 cents per share.


The company said Thursday that without the smelting write-downs, restructuring charges and other special items, it would have earned 4 cents per share. Analysts were expecting 6 cents per share.


Its $5.59 billion in revenue beat the forecast of $5.36 billion from analysts surveyed by FactSet.


The company released fourth-quarter results just hours after announcing that a joint venture pleaded guilty to bribing officials in the Middle East kingdom of Bahrain. The affiliate and Alcoa agreed to pay $384 million in penalties.


Separately, a joint venture of which Alcoa owns 60 percent admitted bribing officials in Bahrain through a London-based middleman. The affiliate, Alcoa World Alumina LLC, will pay $223 million in fines and criminal penalties for violating a federal law against bribing foreign officials, and the parent company agreed to pay a civil penalty of $161 million for related violations of Securities and Exchange Commission rules.


In 2012, Alcoa settled related claims by state-controlled Aluminum Bahrain for $85 million.


CFO William Oplinger told reporters that penalties will be "manageable" because they will be spread over five payments. With the plea deal and the write-down of smelting acquisitions made at least a decade ago, "We've put a number of legacy matters behind us," he said.


Associated Press
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