Dallas, Texas 01/22/2014 (FINANCIALSTRENDS) – Alcoa, Inc. (NYSE:AA), the US based aluminium giant company has in the last few days marched upward on the stock market, despite a shocking fourth quarter earnings miss, banishing the stock ot the lowest rung of the S&P500 . In less than week of the results the stock posted 12% gains, 50% from last September when it was ousted out of the Dow.
Industry dynamics led to Alcoa Inc. restructuring
Alcoa, Inc. (NYSE:AA) has since the dismal slowdown in August, begun the process of losing-off non-performing assets, tightening costs and cutting down on expenses. This has meant that some of the smelting units such as the Massena East smelter in New York will wind up operations by the end of the first quarter of this year. The smelting capacity of Aloca Inc, now stands at 84k metric tons. However, the Western facilities of the same smelter will continue to be in operations until further. Alcoa, Inc. (NYSE:AA) will because of the Q1 restructuring has led to curtailment of 361k metric tons since last year.
Auto and Airline Industry drives AA
Alcoa, Inc. (NYSE:AA) has since seen the demand by the auto industry drive much of the earnings in the recent quarters. Alcoa’s distinct range of light-weight aluminium which includes alloys to reinforce strength developed for the aviation industry find high demand in the industry. The airline industry has also contributed to the increase in the demand for AA products, driven by the recent boom in the aviation industry as well.
Alcoa Inc, posts the recent climb in the stock prices has now received upgrades by the likes of JP Morgan. They moved from Neutral to Overweight and price target revised from $9 to $15. Century Aluminum too offered an upgrade from Underweight to Overweight at $13 target price, up from $6.