NEW YORK (TheStreet) -- Alcoa (AA) is shedding value in extended trading following its fourth-quarter and full-year earnings release. After dropping 1.7% over Thursday's session, the company plunged a further 3.7% to $10.29 after the bell.
The aluminum producer reported net income of 4 cents a share, excluding special items, two cents short of forecasts from analysts surveyed by Thomson Reuters. The company generated sales of $5.6 billion, higher than the $5.34 billion consensus. Increased revenue came in spite of aluminum prices dropping 7% year-over-year.
Full-year earnings of 33 cents a share missed analysts' expectations by a penny but still beat earnings a year earlier by 36%. Revenue of $23 billion was higher than the estimated $22.88 billion analysts forecast. Over the year, the Pittsburgh-based producer realized $1.1 billion in year-over-year productivity gains.
"We delivered strong operating performance in the fourth quarter, led by record downstream profitability, as our strategy to build-out the value-add businesses and lower the cost base in the commodity segment gains traction," said CEO Klaus Kleinfeld in a statement.
The company anticipates global aluminum demand increasing 7% over the year, fueled by the aerospace, automotive and construction industries.
Earlier in the day, Alcoa announced its joint venture Alcoa World Alumina had agreed to pay $384 million to settle bribery allegations brought against it by the U.S. Justice Department and the Securities and Exchange Commission. The company was accused of providing kickbacks to members of the Bahraini royal family to maintain a supply agreement with a state company. Mining company Alumina (AWC) will pay 15% of the total fine.
TheStreet Ratings team rates ALCOA INC as a Hold with a ratings score of C. The team has this to say about their recommendation:
"We rate ALCOA INC (AA) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, impressive record of earnings per share growth and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow, poor profit margins and generally higher debt management risk."
- You can view the full analysis from the report here: AA Ratings Report