Tomahawk, WI 8/05/2013 (Basicsmedia) – Shares of Alcoa Inc. (NYSE:AA) have recently been in the limelight of investors and analysts in the Wall Street for various reasons – both positive and negative. While the stock had recently sent surprises to the investors with the higher than expected earnings reports for the 2Q2013, there had also been concerns among the traders related to the unsettled claims related to the Alba matter.

Earnings for 2Q2013

In the recently reported financial results for the 2Q2013 ending on June 30, 2013, the producer of fabricated and primary aluminium had managed to beat down the expectations of the analysts marginally. It had been reported that Alcoa had generated revenues of $5.85 billion, while the consensus estimate of analysts had been at $5.83 billion. On the other hand, the earnings per share had been reported to be at $0.07 per share which was one cent higher than the analyst expectations.

Despite the increasing concerns on declining prices of aluminium in the international markets, Alcoa had managed to present profitable quarter owing to the success of its business operations and to the stronger USD in the markets. In line with such developments for the second quarter, the company had further projected 7 percent increase in the demand for the aluminium products in the international markets for this fiscal year.

Appointment of VP to corporate affairs

The largest producer of aluminium in the US had been presenting significant developments in the business operations to hold its investors attracted to the stock. Further the company had also announced that Libby Archell would now be appointed as Vice President of the Corporate Affairs at the Board of Directors and would further be reporting to the Chairman and CEO of Alcoa Inc., with effect from September 01, 2013. It is believed that Ms. Archell’s proven ability to handle challenging assignments in the company’s operations at Australia and the US makes her the right fit for this strategic position at the helm of communications.

Unsettled claims on Alba matter

However, it had not all been bright for this largest aluminium producer in the recent days. As is quite popular in the Wall Street, there are claims against the company related to the alleged corrupt payments supposed to have been made for the sale contracts of alumina to Alba. Alcoa Inc. had continuously been making attempts to settle these claims registered with the Department of Justice and the Securities and Exchange Commission.

Recently in 2Q2013, Alcoa had made a cash offer of $103 million to settle these charges with the DOJ, which amounts to an aggregate value of $62 million after non controlling interest. It had further been reported that this offer would potentially increase to $200 million, while the negotiations for settlement are continuing. However, such settlement offers are reported to have been rejected by the Securities and Exchange Commission.

Only a settlement with the DOJ and SEC would suffice to save the company from any adverse fiscal effects from these claims. On the other hand, if the claim proceeds to trial with no settlements reached, it is not assured that the company will not face any adverse material effects to the business operations. With such high level of uncertainty related to the corruption claims against the company, investors had been paying close attention to these developments.

Though the stock had proved to be highly attractive with stronger than expected financial performance results for the 2Q2013 and with recent developments in the business operations, there had also been increasing concern among the investors related to the future developments of the Alba matter. All such uncertainty around the stock of Alcoa Inc. put it under hold rating for the present to avoid any higher level of risk.

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