4/11/2011 3:39:00 PM
NEWS BRIEFS
Alcoa Fastening Segment Sees Record Margin Increase
Alcoa reported sales at its Engineered Products and Solutions segment, including Alcoa Fastening Systems, increased 16% to $1.07 billion in the first quarter of 2011. First quarter segment ATOI soared 60% to $130 million. Sequentially ATOI gained 15%.
Adjusted EBITDA margins improved to a record 18% for the Engineering segment during Q1, up from 17% in the final quarter of 2010 and 14% from Q1 2010.
Automotive end markets for the U.S. and China are seeing the highest growth rates, with the U.S. pegged at 9% to 13% growth and China forecasted at 9% to 14% growth.
Overall Alcoa sales jumped 22% to $5.96 billion in the opening quarter of 2011. Q1 income from continuing operations improved to $309 million compared to a $194 million loss during the first quarter of 2010. Sequentially the income gain was 19.7%.
In March Alcoa completed its $240 million acquisition of the aerospace fastener business of TransDigm Group Inc., a global designer, producer and supplier of highly engineered aircraft components. Total after tax cash proceeds from this transaction are estimated to be approximately $170 million.
The new business is now part of Alcoa Fastening Systems.
“This acquisition is an important step for Alcoa Fastening Systems (AFS),” Alcoa Fastening Systems president Vitaliy Rusakov said when the deal was announced in December 2010.
“It is a part of our strategic plan to accelerate the growth of our business, add efficiencies, broaden our technology base and expand our product offering to better serve our customers and increase shareholder value.”
The deal comes weeks after TransDigm acquired the fastener business when it purchased McKechnie Aerospace in December 2010 following a bidding war with other aerospace companies, including Precision Castparts Corp. (For analysis see “Alcoa Fastening Systems Strengthens Presence With McKechnie Acquisition“)
Alcoa reported Engineering segment sales declined 2.2% to $4.58 billion in 2010, despite an 11% sales increase to $1.21 billion during the final quarter.
Full-year ATOI increased 31% to $415 million, boosting by a doubling of its operating income during the fourth quarter. ©2011 GlobalFastenerNews.com
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Related Links:
• Alcoa
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