Updated Aug 6 at 2:18pm ET.
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Oil prices jumped following news of a draft plan from Iran that would place new conditions on ships moving through the Strait of Hormuz. This narrow waterway is a vital path for global energy supplies.
Energy is one of the largest costs for an aluminum producer like Alcoa. Smelting, the process of turning raw ore into finished metal, requires massive amounts of electricity. If energy prices stay high, it leaves the company with less profit on every ton of aluminum it sells.
Source: CNBC
The company will pay its regular quarterly dividend of 10 cents per share to stockholders of record as of August 11. This is a routine payment and matches what the company has paid in recent quarters. It shows the business is bringing in enough cash to continue its plan of returning some money to owners.
Source: Business Wire
Argus Research analysts reduced their price target for the stock to $55, down from a previous target of $73. Despite the lower target, the firm kept its Buy rating, suggesting they still believe the stock is worth more than its current price of about $48.
This kind of adjustment often happens after a company shares its latest results or outlook. Analysts may be accounting for lower production targets or shifts in the global price of aluminum while still liking the company's overall direction.
Source: Argus Research
The company reported record quarterly revenue of nearly 4 billion dollars, a 24 percent jump from the previous quarter. While the top line was strong, adjusted earnings of $2.12 per share came in just under the $2.25 that Wall Street analysts were looking for. The business also announced it is buying interests in several mining and refining assets from South32 Limited.
The results show a company that is successfully growing its scale, but also facing some production hurdles. Management lowered its full-year outlook for alumina, the material used to make aluminum, by about 250,000 tons. For long-term owners, the focus remains on whether the company can successfully integrate its recent acquisitions to lower its overall costs.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
The company reached a final decision to build a gallium production plant at its existing refinery in Western Australia. The project is backed by the governments of Australia, Japan, and the United States. Gallium is a critical mineral used in semiconductors and electronics.
This move helps the company diversify its business beyond just aluminum. By using its existing refining process to extract other valuable minerals, it can create a new source of income from the same raw materials it already mines. It also strengthens the company's ties with major governments looking to secure supplies of essential technology materials.
Source: WSJ
Analysts recently adjusted their outlooks following the company's second-quarter earnings report. Most analysts, 23 of 42, rate the stock a buy, and the average target price of $66 suggests a 38% increase from today's price.
The company has a habit of beating expectations, though it has fallen slightly short in the last two quarters. It is growing fast, with revenue up about 31 percent over last year.
| Expectation | |
|---|---|
| EPS | $1.56 |
| Revenue | $3.85B |
