Why Alcoa Inc (NYSE:AA) Holds Great Promise


Dallas, Texas 07/10/2015 (Financialstrend) – Alcoa Inc (NYSE:AA), the bell-weather company of the Aluminium industry, may have not had a good quarterly result to report, on July 8, but many remain bullish about the company yet. That is because, they remain positive that the company will soon overcome the challenges that were unique to the industry, in the coming weeks.

Aloca Inc management has been proactive in informing its investors of the strategies it is implementing to break-through the industry challenges. These strategies include cost cutting as well as revamping core competency of Alcoa Inc to align with the latest industry challenges.

Boom in Aerospace Orders

Alcoa Inc (NYSE:AA) CEO Laus Kleinfeld during the conference call reported that the company would take advantage of the current boom in the aerospace industry.  The company’s strength – developing innovative, light-weight aluminum – is expected to keep the company in full-production because of the massive demand for aircrafts currently.

Many of the airlines are expanding their fleets with new aircraft, ordering them from major manufacturers of aircrafts. The new orders are therefore, keeping Alcoa Inc busy as well.

Automotive demand for lightweight materials

Alcoa Inc (NYSE:AA) is also expected to benefit from auto manufacturers need for lightweight fabrication materials as well. The new fuel-efficient regulations require that automaker have to find economic alternatives to traditional materials. Alcoa Inc products perfectly fit the bill for light-weight fuel-efficient vehicles, as proved by F-150 pickup truck redesign in these materials.

Alcoa also expects to usher in more cost-cutting to mark a turnaround soon. It is looking at higher margins and commodity pricing. It has already closed-in on facilities with higher operating costs and opting for low-cost alternatives.

Soon Alcoa Inc (NYSE:AA) is expected to benefit from the series of acquisitions it has been making. These include a casting specialist in Titanium, TITAL, component manufacturer- Firth Rixon and yet-to-be finalized RTI International Metals deal.

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