Reliance Steel & Aluminum Beats Analyst Estimates on EPS

Reliance Steel & Aluminum (NYS: RS) reported earnings on Oct. 25. Here are the numbers you need to know.
The 10-second takeaway For the quarter ended Sep. 30 (Q3), Reliance Steel & Aluminum missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share increased significantly.

Margins grew across the board.
Revenue details Reliance Steel & Aluminum chalked up revenue of $2.06 billion. The eight analysts polled by S&P Capital IQ predicted sales of $2.12 billion on the same basis. GAAP reported sales were 3.9% lower than the prior-year quarter's $2.14 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details EPS came in at $1.30. The 12 earnings estimates compiled by S&P Capital IQ forecast $1.19 per share. GAAP EPS of $1.30 for Q3 were 15% higher than the prior-year quarter's $1.13 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details For the quarter, gross margin was 26.0%, 290 basis points better than the prior-year quarter. Operating margin was 7.4%, 80 basis points better than the prior-year quarter. Net margin was 4.8%, 80 basis points better than the prior-year quarter.
Looking ahead Next quarter's average estimate for revenue is $2.04 billion. On the bottom line, the average EPS estimate is $1.07.
Next year's average estimate for revenue is $8.66 billion. The average EPS estimate is $5.26.
Investor sentiment The stock has a four-star rating (out of five) at Motley Fool CAPS, with 548 members out of 572 rating the stock outperform, and 24 members rating it underperform. Among 128 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 121 give Reliance Steel & Aluminum a green thumbs-up, and seven give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Reliance Steel & Aluminum is outperform, with an average price target of $61.92.

http://www.dailyfinance.com/2012/10/27/reliance-steel--aluminum-beats-analyst-estimates-/

Novelis CEO: Aluminum price hurt by supply

--Novelis CEO expects aluminum price to hold near current levels for 9-12 months

--Company is using more recycled aluminum

--Novelis reports quarterly income of $91 million, up from $62 million a year earlier

(Adds recycling strategy, market outlook, expansion plans and auto shift details)

Aluminum prices are likely to stay near their current low levels for the next nine to 12 months, pressured by a supply overhang of the lightweight metal, the chief executive of aluminum products maker Novelis Inc. said Tuesday.

Benchmark aluminum prices on the London Metal Exchange have traded near two-year lows for weeks, on a surplus of metal and production capacity, as well as on worries about demand amid slowing growth in China and the financial struggles in the euro zone.

Aluminum for delivery in three months recently traded at $1,849 a metric ton, down from almost $2,600 a metric ton a year ago.

Prices are likely to "hover at this level" for as much as a year, Novelis Chief Executive Phil Martens said in an interview. He said the smelter shutdowns some aluminum makers had announced in an effort to avoid lower prices were helping to balance the market, but "we just don't see the market dynamics pushing (prices) back to the $2,600 level."

Novelis, Mr. Martens said, was trying to limit its exposure to LME pricing by using more recycled aluminum. Low prices are "just a reminder that the strategy we're on is the right strategy. We're beginning to see the resilience in our business model."

The company expects to boost its use of recycled aluminum, which costs less than new metal, to 80% by 2020. The benefit from using recycled material was limited this year, Mr. Martens said, as LME prices fell closer to the cost of scrap.

Mr. Martens said he was most confident in automotive and can demand for the balance of 2012, and more cautious toward the outlook for consumers in the electronics and construction sectors. Novelis supplies companies such as Coca-Cola Co. KO +0.20% , Ford Motor Co. F +0.43% , and Samsung Electronics .

Atlanta-based Novelis on Tuesday reported a 20% increase in net income during the three months ended June 30 as lower costs made up for declines in shipments and sales. During the fiscal first quarter, Novelis reported net income of $91 million, up from $62 million during the same period a year earlier.

Aluminum shipments fell 6% from a year ago. Revenue slumped 18%, to $2.6 billion on the decline in shipments and lower aluminum prices.

The company expects to report negative free cash flow, or operating profit less investments and asset sales, to be negative through 2012 as the company invests in expansion projects. Novelis expects capital expenditures of $650 million to $700 million during the fiscal year that started in April, from $516 million the prior year, as it expands rolling mills in Brazil and South Korea and automotive capacity in the U.S. and China.

Novelis has shifted its focus away from lower-margin businesses such as foil, selling or closing plants while refocusing products for the automotive and electronics industries. Automotive business now totals about 10% to 12% of the company's shipments, Mr. Martens said, up from 6% to 7% a year ago. Beverage and food cans account for more than half of the company's shipments.

Novelis is a unit of Indian aluminum producer Hindalco Industries Ltd. . Novelis is the world's largest producer of rolled aluminum, which is used in beverage cans, packaging, automobiles and electronics, among other applications. 

http://www.marketwatch.com/story/novelis-ceo-aluminum-price-hurt-by-supply-2012-08-14

US- Alcoa and the aluminum survival handbook

Alcoa is something of a corporate bellwether for the global aluminum industry. The US company's operations span the full gamut of the light metal's value-added chain from mining the bauxite needed to produce the stuff all the way through to specialist engineered products tailored to meet the requirements of aerospace and automotive customers. Its Q2 results, therefore, provide a telling snapshot of the strains on the entire aluminum sector resulting from the current price weakness. On the London Metal Exchange (LME) benchmark three-month aluminum hit a one-year low of $1,832 per ton in June. As with the other base metals traded on the LME an early-July rally has quickly run out of steam and aluminum is once again foundering around the $ 1,900 level. So no particular surprise as to the prime cause of the slide in Alcoa's headline earnings from net income of $ 94 million in the first quarter of the year to a net loss of $ 2 million in the second. While downstream divisions performed well, and with rolled products even generating record operating income in the first half of the year, Alcoa's primary metals business took a $ 58-million sequential hit from the lower aluminum pricing environment. There was some clawback from currency effects, $ 19 million, and from higher physical market premiums, $ 15 million. But not enough to stop the division sliding into the red in Q2 to the tune of a net $ 3 million. All of which palpably frustrates Klaus Kleinfeld, Alcoa president and chief executive officer. After all, Alcoa is still projecting global demand growth of 7 percent this year, split between 11-percent growth in China and 3 percent in the rest of the world. If even close to the mark, this would be a remarkable outcome given the combination of engineered slowdown in China and far-from-engineered slowdown just about everywhere else. But then aluminum is leveraged to key growth sectors such as automotive, where it is gradually winning a long-term materials battle with steel, and aerospace, characterized by an order backlog stretching to years and an ageing commercial airline fleet. Stocks of aluminum, according to Alcoa, may still be high but at 76 days' global usage they are down on the 102-day peak seen in 2009 at the height of the Great Contraction. The price of aluminum, argued Kleinfeld on the Q2 analysts call, has decoupled from this fundamental demand strength, becoming subsumed within the general macro risk-on-risk-off trade that has dominated all asset classes ever since. That is at least partly true. Many base metals have become more closely correlated with other asset classes over the last four years. But there is the thorny question of whether the world is still producing too much aluminum, which could of course be one fundamental reason why the price is where it is. Alcoa thinks not, forecasting a global 515,000-ton production deficit this year. It's a nigh unprovable proposition given the opacity of the aluminum sector, not least in China, both the world's largest consumer and producer. In short, you're going to have take Alcoa's word on it. And Alcoa, in Kleinfeld's words, is going to have to "let the market do what the market is going to do." Since the market is stubbornly declining to reflect Kleinfeld's optimistic analysis of aluminum's "sound fundamentals," Alcoa's ongoing response is something of a survival handbook for every other margin-compressed producer. Alcoa is "targeting every single lever that we have" to improve group productivity from stream-lining purchasing to more efficient scrap usage to maximizing products capability to reducing days' working capital. But at the core of the strategy is the company's five-year plan to move 10 percentage points down the global aluminum cost curve from 51st percentile in 2010 to 41st in 2015. And here smelter portfolio management is key. If smelters have been idled for several years with diminishing chances of ever reopening, dismantle them. Alcoa has permanently closed 291,000 tons of capacity, comprising all of the Tennessee smelter and one-third of its Rockdale smelter in Texas. If smelters are not competitive at lower prices, idle them. Alcoa is in the process of mothballing some 14 percent of its global metal capacity, mainly in Spain and Italy. Such action can, of course, be presented to the wider world as taking global leadership in response to difficult market conditions. And if you curtail primary smelter capacity, you may as well curtail alumina capacity, as Alcoa has done with 390,000 tons of its intermediate product capability. If government levers can be used to preserve struggling smelters, use them. Alcoa has been reviewing the future of both its Point Henry smelter in Australia and its Brazilian smelter operations. Point Henry has just been given a stay of execution until at least mid-2014. An assistance package worth more than A$40 million from the Australian government may have helped. In Brazil Alcoa "has raised the issue of competitiveness, or lack of it, on energy prices," the single more important input variable in any smelter's profitability profile. Kleinfeld told analysts that "I believe there are going to be actions taken sooner rather than later" by the Brazilian government. And finally, if you can't beat new lower-cost entrants to the global aluminum sector, join them. Alcoa is building an ultra-low cost integrated alumina-aluminum-products facility in Saudi Arabia. The 740,000-ton per year smelter component of the Maaden project is on schedule to start production next year. This is the law of the jungle. Remember the old joke. You don't need to outrun the lion, just the guys running with you. The only problem is the cost curve itself. The most obvious point is that it is never static, largely because everyone is simultaneously trying to move down it, redefining it as they do. This is what is happening in China with smelter capacity migrating from east, where power availability is restricted and prices accordingly high, to west, where stranded coal deposits afford much lower power prices. And it's happening elsewhere. Alcoa is not the only producer migrating capacity to the Middle East to tap into the region's abundance of energy. Rio Tinto and Hydro have already done so with new smelters in Oman and Qatar respectively. A more fundamental issue with cost-curve economics in the aluminum market, though, is the gap between theory and reality. If governments are prepared to subsidize power prices, as is the case with an estimated 25 percent of Chinese aluminum capacity right now, then evidently the cost curve is not what it should be on paper. This isn't just about China, witness the Australian government's helping hand to Alcoa's Point Henry smelter and the Brazilian government's consideration of the "competitiveness, or lack of it" in local energy prices. The resulting problem is, to quote researchers at Barclays Capital, that such "interventions disrupt efficient market mechanisms resulting in distortions and dislocations with bearish implications for fundamentals and prices." Government assistance negates the cost curve at precisely the point it should be effective in matching supply to demand. As a consequence, as BarCap points out, the market will remain prey to over-production resulting from the build-out of excess capacity. You may well believe Alcoa's contention that enough capacity has been cut to generate a market deficit this year. If you don't, however, the implication is that prices must go lower to compensate for non-market intervention. And what will the cost curve look like by 2015? Will Alcoa have achieved its goal of being in the 41st percentile? Or will it need a new five-year plan to replace the current one? This chase down the aluminum cost curve is one without obvious end. Alcoa must keep running. So too must every other producer. - Andy Home is a Reuters columnist. The opinions expressed are his own. http://www.menafn.com/menafn/1093534034/US-Alcoa-and-aluminum-survival-handbook

Ugprades for aluminum electrolytic capacitors boost frequency, lower impedance

Companies are also developing units with a longer service life, broader temperature range and compact designs.
High-frequency, low-impedance models are defining R&D trends in mainland China’s aluminum electrolytic capacitors industry. Makers are developing units exceeding 100kHz, at least 10 times what current variants support. They are pushing down the impedance to below 1.8 from 3mohm. Many companies are gearing up to close the gap with Taiwan and Hong Kong counterparts that have introduced 0.1mohm and even 50μohm types.
Businesses are likewise extending the life span and operating temperature range, especially for versions targeted at car audio systems and power supplies for electric and hybrid vehicles. Wuxi Antang Technology Electronics Co. Ltd is manufacturing such components specifically for automotive audio equipment. It ships all output to the US, Europe and South America.
Makers are extending the service life to 8,000 or more than 10,000hr as opposed to the current 1,000 to 5,000hr supported by most releases. As for the operating temperature, companies are setting their sights on 125 C, an improvement from the -40 to 85, 25 to 85 and -25 to 105 C of existing units.
Compact capacitors are rising in number as well. Buyers can look forward to V-chip types measuring 4 to 18mm in diameter. Axial models 4 to 10mm in diameter are also in the pipeline.
Many suppliers are hoping to expand production capacity, and toward this end are adopting advanced manufacturing and testing equipment. A growing number of them are gearing up to meet ISO, RoHS and other international quality requirements.
Still others are seeking to hire new employees to address delays in fulfilling orders.
Haimen Sancon Jetwell Electronics Co. Ltd can churn out 80 million units monthly but will invest $800,000 to increase output of bolt-type capacitors. The enterprise uses capacity, voltage, drain current and loss testers, and X-ray and RoHS analyzers in its 45 lead, 12 welding pin and three bolt capacitor lines. The main export destinations are India, Hong Kong, Taiwan, Russia and Turkey.
Makers see strong prospects for the line, especially amid the growing automotive industry. China’s car electronics market is forecast to expand further in the next 10 years. The government’s 12th Five-Year Plan supports the sector via credit financing and discounted export credit insurance rates, particularly for manufacturers of “new energy” vehicle technologies and other automotive systems.
Aluminum electrolytic capacitors, in particular, are poised for an uptick in demand. The product accounts for 34 percent of the country’s total capacitor output. China represented one -third of global sales last year, which reached $5.5 billion. This is forecast to hit $5.8 billion by end-2012.

http://www.globalsources.com/gsol/I/Aluminum-electrolytic/a/9000000123394.htm

Bodine Aluminum Donates $10,000 To P-L Tech Rebuild

Bodine Aluminum in Troy, recently presented a $10,000 check to Pike-Lincoln Technical Center for use in the rebuilding of the facility.
The main building of Pike-Lincoln Technical Center was destroyed in a fire on Dec. 2, 2011.  These funds may be used as local match for grant funding through the State of Missouri to purchase equipment or building materials.
Pike-Lincoln Technical Center has served the Pike, Lincoln and surrounding communities since 1973 through the offering of career and technical education programs to high school and adult students.  Current daytime programs include Administrative Business Technology, Auto Collision, Auto Services, Computer and Networking Technology, Diesel Technology, Digital Design, Health Sciences, Paramedic, Practical Nursing and Welding.  Students who attend Pike-Lincoln Technical Center receive skilled education leading directly to employment or further education after high school through apprenticeships, technical, community or four-year colleges.
Numerous tech center graduates have gone to work for Bodine Aluminum over the years. Pike-Lincoln Technical Center graduates often stay in the local community.
“We are excited to have the donation and commitment from Bodine Aluminum to help us continue our tradition of preparing residents to be productive employees and community residents,” said Krista Flowers, director of the school.
Bodine Aluminum has long been a supporter of the local community.  Many of Bodine’s philanthropic efforts focus on programs that enhance education and help foster technical skills of local students.  The recent donation to Pike-Lincoln Technical Center was presented by Terry Henderson, General Manager of Bodine Aluminum and Kathryn Ragsdale, Specialist for Corporate Affairs, Toyota, Bodine Aluminum.
For more information or to provide input on the rebuilding of Pike-Lincoln Technical Center programs, please visit www.pltc.k12.mo.us, call 573-485-2900 or e-mail, info@pltc.k12.mo.us

Birmingham Aluminum expands after funding is secured

An aluminium and multi-metals components manufacturer has expanded its West Midlands headquarters after getting financial backing.
Birmingham Aluminium has invested £300,000 in the purchase of the unit next door to its base on Farrow Road in Great Barr, along with additional machinery, after securing the funding through Yorkshire Bank’s Investing For Growth initiative.
The company, which employs a total of 24 people, and has increased turnover by 20 per cent to £3.06 million over the last 12 months, now has around 22,500 sq ft of space after buying the 7,500 sq ft unit.
Joint-managing director, Steve Kane, said the investment represented one of the biggest expansions in the company’s 16 year history and was made possible following a surge in demand for its products on the continent.
“Our overseas market has probably doubled over the last 18 months, and now represents around 15 per cent of our turnover, which is up by a fifth in the last year,” he said.
“One of the major reasons behind this growth has been due to the success of our website after we translated it into seven languages with help from the Birmingham Chamber of Commerce.
“Orders and enquiries from countries such as France, Germany, eastern Europe, China, the Benelux countries, Scandinavia, Australia and USA have really taken off over the last 18 months and have led to us being able to make this investment.”
Birmingham Aluminium produces around 7,000 products for the electronics, transport, drives and controls, leisure, security and furniture components sectors with its products found in anything from electrical goods to train engines.

Read More http://www.birminghampost.net/birmingham-business/birmingham-business-news/manufacturing-and-skills-business/2012/04/27/birmingham-aluminum-expands-after-funding-is-secured-65233-30854537/#ixzz1tJ7wvoqB

Noranda Aluminum Holding Beats Estimates but Has a Big Earnings Drop

Noranda Aluminum Holding reported earnings on April 25. Here are the numbers you need to know.

The 10-second takeaway For the quarter ended March 31 (Q1), Noranda Aluminum Holding met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share dropped significantly.
Gross margins contracted, operating margins grew, net margins dropped.
Revenue details Noranda Aluminum Holding booked revenue of $353.5 million. The five analysts polled by S&P Capital IQ anticipated revenue of $352.0 million on the same basis. GAAP reported sales were 10% lower than the prior-year quarter's $394.6 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS details Non-GAAP EPS came in at $0.18. The six earnings estimates compiled by S&P Capital IQ anticipated $0.06 per share on the same basis. GAAP EPS of $0.24 for Q1 were 57% lower than the prior-year quarter's $0.56 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
Margin details For the quarter, gross margin was 13.9%, 290 basis points worse than the prior-year quarter. Operating margin was 10.8%, 30 basis points better than the prior-year quarter. Net margin was 4.6%, 510 basis points worse than the prior-year quarter.
Looking ahead Next quarter's average estimate for revenue is $373.8 million. On the bottom line, the average EPS estimate is $0.21.
Next year's average estimate for revenue is $1.49 billion. The average EPS estimate is $0.92.
Investor sentiment The stock has a three-star rating (out of five) at Motley Fool CAPS, with 33 members out of 36 rating the stock outperform, and three members rating it underperform. Among 10 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 10 give Noranda Aluminum Holding a green thumbs-up, and none give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Noranda Aluminum Holding is outperform, with an average price target of $13.31.
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