Alcoa to Curtail 147,000 Metric Tons of Smelting Capacity at Two Smelters and Red Hat Fails to Deliver with Earnings
Alcoa Inc. (NYSE: AA) shares fell on Friday on news that it will cut capacity at two aluminum smelters in Brazil. The stock hit a yearly high of $12.75 before falling to close at $12.48 a share. The company announced that it will curtail 147,000 metric tons of smelting capacity at its Sao Luis and Pocos de Caldas smelters due to falling aluminum prices and rising costs. The move will leave the Pocos de Caldas smelter full idle. The mine, aluminum powder plant, and cast house at Pocod de Caldas and the refinery at Sao Luis will continue normal operations. These curtailments will lead to first-quarter charges between $40 million and $50 million, or four to five cents a share – 30% of which will be non-cash.
We are taking measures to curtail high-cost smelting capacity that is not competitive and reshape our cost profile," said Bob Wilt, President of Alcoa Global Primary Products. "These are difficult but necessary actions in support of Alcoa’s strategy to lower the cost base of our upstream businesses."
Alcoa Inc. produces and manages primary aluminum, fabricated aluminum, and alumina. The company operates in four segments: Alumina, Primary Metals, Global Rolled Products, and Engineered Products and Solutions. The Alumina segment is engaged in mining of bauxite, which is then refined into alumina. The Primary Metals segment produces aluminum.
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Red Hat, Inc. (NYSE: RHT) shares dropped after management guided for below-consensus first-quarter and full-year results. Red Hat said it expects revenue between $412 million and $415 million for its first quarter ending May. This comes in below what analysts surveyed by Thomson Reuters forecast. They were looking for sales of $414.98 million, at the high-end of management's range. First-quarter net income also fell short of expectations. Red Hat issued earnings guidance of 32 cents to 33 cents a share, lower than analysts' estimates of 34 cents a share. For the company’s fiscal 2015 ending February, the Raleigh, it expects revenue between $1.73 billion and $1.75 billion and earnings in the range of $1.54 to $1.56 a share. Analysts had expected full-year sales of $1.751 billion and earnings of $1.58 a share.
Red Hat, Inc. provides open source software solutions primarily to enterprise customers worldwide. The company develops and offers operating system, middleware, virtualization, storage, and cloud technologies. Its products include Red Hat Enterprise Linux, an operating system designed for enterprise computing; Red Hat JBoss Middleware that offers a range of middleware offerings for developing, deploying, and managing applications that are accessible via the Internet, enterprise Intranets, extranets, clouds, and virtual private networks; Red Hat Virtualization, which includes standalone virtualization functionality and management tools for server and desktop deployments; and OpenShift Enterprise 2, a solution that provides configured application development, testing, and hosting environment for application developers.
Get more information on Red Hat, Inc. and free access to the in depth equity report at: www.TrendingWallStreet.com/stockquote/RHT
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