Noranda soars after Q1 report

Small loss beats expectations

Noranda Aluminum Holding reported a smaller-than-expected loss in the first quarter, giving a pop to its shares, which have been pummeled so far in 2013 as aluminum prices around the world have been falling.

Excluding one-time items, losses came in at $1.3 million versus a profit of $12.7 million last year. Per diluted share, that amounted to a loss of 2 cents, beating expectations by 4 cents. Revenues at Franklin-based Noranda were $338 million for the quarter, down 4 percent year over year.

"Because of uncertain macroeconomic conditions, LME aluminum prices remain below long-term equilibrium levels, and have declined since mid-February," said President and CEO Kip Smith. "In the current price environment, we are evaluating and taking appropriate actions to manage our liquidity position and provide for prudent investment in long-term growth. In March 2013, we refinanced the $275 million balance of the senior floating rate notes due 2015. After this refinancing, we have no funded-debt maturities before 2019."

Investors very much liked what they saw in Noranda's numbers. At about 12:20 p.m. Wednesday, shares of the company (Ticker: NOR) were up 28 percent to about $4.20. Volume was very heavy, with 1.1 million shares already having changed hands. The stock's daily average is about 530,000. Despite that, though, the shares are still down about 30 percent so far this year and 75 percent from their peak of two years ago.

On his team's conference call with analysts and investors, Smith said demand across the country was stable during the quarter and that most input prices are expected to stay flat this year. Results also were helped by an improvement in operations.

"For 2013, each of our businesses [...] has introduced a program on reliability centered maintenance," Smith said. "As a result, in each business we are seeing improved equipment reliability which supports the performance of our facilities. As we tell our teams internally, we aren’t declaring victory, but it is appropriate to celebrate our success based on what we saw in this first quarter."