Alcoa Corp (NYSE: AA) stock fell over 10.3% in the last one week (Source: Finviz) after the company posted lower than expected results for the fourth quarter of FY 19. Alcoa reported a net loss of $303 million, in the fourth quarter of 2019 compared to a net loss of $221 million, in the third quarter of 2019. This included the charges related with the closure of the Point Comfort refinery in Texas, which had been fully curtailed since 2016. The stock recovered over 0.9% on 17th January, 2020 (as of 11:38 am GMT-5; Source: Google finance)
During the fourth quarter lower raw materials costs, was partially offset the impact of lower alumina and aluminum prices. On the back of lower market prices for alumina and aluminum, the adjusted EBITDA fell down $77 million and $23 million, respectively. Fourth quarter lower raw materials costs, was partially offset the impact of lower alumina and aluminum prices. Lower market prices for alumina and aluminum led the adjusted EBITDA down $77 million and $23 million, respectively. In the fourth quarter, the company has ended the year with cash of $879 million, up $38 million sequentially. Year-over-year, the cash has declined $234 million.
AA in the fourth quarter of FY 19 has reported the adjusted loss per share of 31 cents, missing the analysts’ estimates for the adjusted loss per share of 22 cents. The company had reported the adjusted revenue of $2.44 billion in the third quarter of FY 20, missing the analysts’ estimates for revenue by 1.07%. Year-over-year revenues has fallen $908 million, compared to the fourth quarter of 2018, again on lower alumina and aluminum prices.
At year-end, the consolidated pension and OPEB net liability were up to $2.4 billion, up only $40 million year-over-year in spite of lower discount rates increasing the net liability by approximately $600 million. Global pension asset returns were approximately 17% and actions taken to manage the pension and OPEB liabilities offset the increase related to the discount rate
For fiscal 2020, the company expects the shipments to increase year-over-year in all three product segments as existing facilities creep production in bauxite and alumina. And in Aluminum, Becancour restart ramps up. With the divestiture of the Afobaka hydroelectric dam in Suriname and the Gum Springs, Arkansas treatment facility and the closure of the Point Comfort refinery, the company expects transformation EBITDA to be negative by approximately $85 million, compared to negative $7 million in 2019. The majority of that impact is from the divestiture of the Suriname dam.