Alcoa Reports Lower Earnings, Extends Alcan Offer
Alcoa, the world's largest aluminum company, said after U.S. markets closed Monday that second-quarter profit slipped, partly due to charges including one for its outstanding offer to acquire Canadian rival Alcan.
Alcoa has offered to buy Alcan for $28.6 billion. The offer, which has been rejected by Alcan, was to expire Tuesday July 10, but Alcoa said it extended it until Aug. 10. Alcoa has received about 418,500 Alcan common shares so far.
Shares of Alcoa declined less than 1 percent in after-market trading.
Earnings from continuing operations were $716 million, or 81 cents a share, compared with $749 million, or 85 cents a share in the same quarter of last year, the Pittsburgh-based company said. Revenue rose to $8.1 billion from $7.8 billion.
Net income for the quarter was $715 million, or 81 cents.
The earnings matched Wall Street estimates, but the revenue figure fell below the analysts' average consensus of $8.41 billion, according to Reuters Estimates.
Included in the quarterly results was a favorable after-tax restructuring adjustment of $21 million, or 2 cents per share from completion of Alcoa's soft alloy extrusion joint venture with Sapa.
There was also a 2 cent per share charge in after-tax transaction costs stemming from the company's offer for Alcan.
The strong quarterly results were achieved despite $36 million, or 4 cents per share, of curtailment costs at Alcoa's Tennessee and Rockdale, Texas smelters.
"It looks like it was a good quarter. It was less than last year, but the metal price was lower than last year," said analyst Charles Bradford of Bradford Research/Soleil.
Chief Executive Officer Alain Belda said the increase in revenue was driven by higher volumes and improved mix of products.
Talking of the Alcan offer extension, he said Alcoa was "proceeding well with the regulatory approvals necessary to complete that transaction."
"We remain the natural partner for Alcan with the most substantial synergies and an unparalleled commitment to Canada and Quebec," Belda said.