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Dow component Alcoa announced a fourth quarter loss of $193 million, or -$0.03 per share, on $6 billion in revenues, today.
The headline figure represents a 7% sequential decline, but a 6% year-on-year gain. Analysts had forecast top line results of $5.7 billion.
Shares in Alcoa rallied 3.0% earlier this afternoon, continuing its ascent after hours. However, the company has given up those after hours gains and is now roughly flat.
“Alcoa turned in solid performance in a volatile year by responding quickly to changing market conditions and relentlessly managing cash,” said Alcoa CEO Klaus Kleinfeld. “We stayed focused on growth and took aggressive action to cut costs, improve our competitiveness, and strengthen our balance sheet.”
The loss was widely expected today, after the company announced it would cut capacity in the face of oversupply. Analysts at a number of firms, including Deutsche Bank and Credit Agricole, have been revising estimates lower since news hit the Street. Analysts polled by Bloomberg forecast earnings of -$0.03, below expectations set just days earlier for a loss of a penny a share.
For the full year, revenue grew 18.7%, topping $24.9 billion.
Last week, the global aluminium conglomerate announced it would cut smelting capacity by 12%, closing facilities in Tennessee and Texas.
Today, in its continued effort to stabilise prices and boost margins, Alcoa announced it would also shutter operations in Portovesme, Italy, as well as La Coruña and Avilés, Spain. The European lines are some of the highest-cost smelters in the company’s system.
The company took charges of $159 million relating to the closure of those plants during the final quarter of the year.
The Pittsburgh, Penn., company forecasts aluminium demand will increase 7% in 2012, as well as a supply deficit of 600,000 metric tons.