In accordance with tradition,Alcoa has reported its Q4 2015 earnings first.Earnings per share were 0.04 versus the estimate of 0.02,a slight beat;while revenue came in at 5.25 billion dollars versus the 5.29 billion estimate,a bit of a miss.The company says it exceeded productivity goals,however.It expects continued strong demand for aluminum and strong global aerospace sales.Indeed,it is planning to spin off the aerospace business in 2016,so will implement the overhead reduction program this year.*
It's been really a solid quarter,said Alcoa CEO Klaus Feldman.We've seen a string of large contracts.We've doubled our auto shipments over the past year.Look at the cash;look at productivity-all this we've got under control.We have five different businesses.We're building up our bauxite business.We have an energy business.Today we're in a trough,and we're still doing well.We have 1.9 billion in cash and we believe global demand will rise by 6.9%.Aluminum is a hot metal.*
How is the China downturn affecting Alcoa? We are not dependent on China.China has opportunities,rather than threats for us,Mr.Feldman explained.*
Some part of this 15% drop in China is domestic;but part is fundamental,added Timothy Moe,chief Asia equity strategist at Goldman Sachs.The fundamentals are:
a.concerns about growth;and
b.concerns about the depreciation of the currency,the renminbi.
Any concern that growth is slowing is a real fundamental read-across,Mr.Moe observed.*
Alcoa Inc (AA),Goldman Sachs (GS)
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