Alcoa, Airbus in $110M Supply Deal - Analyst Blog
December 17 2013 - 12:00PM
Zacks
Aluminum giant
Alcoa (AA) has cut a multi-year supply pact with
Airbus worth roughly $110 million. Under the deal, Alcoa will
supply titanium and aluminum aerospace forgings to aircraft maker
Airbus.
These parts will be made by Alcoa
using its recently modernized 50,000-ton press in Cleveland, Ohio.
The press leverages state-of-the-art controls to address stringent
aerospace specifications and has the capacity to make the world’s
largest and most complex titanium, nickel, steel and aluminum
forgings.
Titanium parts, to be supplied by
Alcoa, include forgings used to connect the wing structure to the
engine, for Airbus’s most fuel-efficient single-aisle jet –
A320neo. The company will also supply large aluminum forgings for
the A330 and A380 including the A380 inner rear wing spar, the
world’s largest aerospace forging. Many of these forgings support
the wing structure where strength-to-weight ratio is vital for
efficient flight performance.
Alcoa, last year, entered into
$1.4 billion multi-year supply agreements with Airbus for its
aerospace aluminum sheet, plate and hard alloy extruded products.
Apart from sheet, plate, forgings and extrusions, the company’s
specialty fasteners and structural castings are also used on Airbus
aircraft. The new agreement reinforces Alcoa’s long-standing
relationship with Airbus.
Alcoa is a world leader in
production and management of primary aluminum, fabricated aluminum,
and alumina. The company is also the world’s largest miner of
bauxite and refiner of alumina.
Alcoa holds leading market
positions in aerospace forgings, extrusions, jet engine airfoils
and fastening systems. Its aerospace business delivered $3.8
billion in revenues last year.
Alcoa is seeing strength in the
aerospace market. The company expects 9% to 10% growth in the
aerospace market this year, backed by higher air travel demand, new
aircraft orders, strong existing order backlog and a rebound in the
jet segment.
Alcoa currently retains a Zacks
Rank #2 (Buy).
Other mining stocks with
favorable Zacks Rank are First Quantum Minerals
Ltd. (FQVLF), Freeport-McMoRan Copper & Gold
Inc. (FCX) and Denison Mines Corp. (DNN).
All of them hold a Zacks Rank #2 (Buy).
ALCOA INC (AA): Free Stock Analysis Report
DENISON MINES (DNN): Free Stock Analysis Report
FREEPT MC COP-B (FCX): Free Stock Analysis Report
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