Noranda Aluminum Holding Corporation reported results for second quarter 2014.

Noranda Aluminum Holding Corporation today reported results for second quarter 2014.

"Our second quarter 2014 results represent a sequential improvement in our operations," said Layle K. (Kip) Smith, Noranda's President and Chief Executive Officer. "We improved the operating reliability of our business, focused on preserving liquidity and continued to make accretive investments in growth and productivity."

Sales for second quarter 2014 were $345.9 million, compared to $311.6 million in first quarter 2014 and $352.0 million in second quarter 2013.

• Sequentially (comparing second quarter 2014 to first quarter 2014), sales increased $34.3 million, or 11%. Approximately $24.2 million of this revenue improvement was due to seasonally higher external shipments of primary and flat-rolled aluminum products. The remaining increase was largely due to a $0.04 per pound sequential improvement in the realized Midwest Transaction Price for primary and flat-rolled aluminum products, driven by modest improvements in both the LME aluminum price and Midwest Premium.
• Year-over-year (comparing second quarter 2014 to second quarter 2013), sales decreased $6.1 million, or 2%, due largely to lower prices and volume in the Alumina segment and a one-day power outage during second quarter 2014. Additionally the Primary Aluminum segment experienced lower LME prices and lower volume during second quarter 2014.

Total second quarter 2014 segment profit was $30.4 million, compared to $10.7 million in first quarter 2014 and $25.0 million in second quarter 2013.

• Sequentially, segment profit increased $19.7 million. Results improved with the absence of the higher first quarter 2014 production costs in the Alumina and Primary Aluminum segments that were related to unusually extreme winter weather in the first quarter ($11.3 million), and higher LME aluminum prices and Midwest premiums ($6.6 million). Other positive factors included seasonal improvements in flat-rolled products shipments ($3.6 million) and favorable prices for key production inputs such as natural gas ($2.0 million). The positive factors were partially offset by the negative impacts of a one-day power outage at the Gramercy alumina refinery ($5.0 million) and seasonal peak power rates in the Primary Aluminum segment ($5.4 million).
• Year-over-year, segment profit increased $5.4 million, largely due to a $4.1 million impact from higher LME aluminum prices and Midwest premiums. Savings from the Company's CORE (Cost Out, Reliability & Effectiveness) program combined with lower prices for key production input costs to offset the effects of a one-day power outage at the Gramercy alumina refinery.

Reported second quarter 2014 results were a $7.6 million net loss ($0.11 loss per diluted share), compared to a $16.8 million first quarter 2014 net loss ($0.25 loss per diluted share) and a $12.3 million second quarter 2013 net loss ($0.18 loss per diluted share).

Excluding special items, Noranda's second quarter 2014 results were a net loss of $6.6 million ($0.10 loss per diluted share), versus a net loss of $16.1 million ($0.24 loss per diluted share) in first quarter 2014 and a net loss of $10.6 million ($0.16 loss per diluted share) in second quarter 2013. The $9.5 million sequential decrease in net loss (excluding special items) primarily reflects a $19.7 million ($13.0 million after-tax) improvement in segment profit, offset by an increase in LIFO inventory expense. The $4.0 million year-over-year decrease in net loss (excluding special items) reflects a $5.4 million improvement in segment profit ($3.6 million after-tax).

Year-to-date Results

Sales for the first six months of 2014 were $657.5 million, compared to $690.4 million in the six months ended June 30, 2013. Of the $32.9 million decrease in sales, $23.2 million was attributable to lower realized prices in the Alumina, Primary Aluminum, and Flat-Rolled Products segments. The remaining portion of the sales decline was principally attributable to lower external shipment volumes in the Primary Aluminum segment. Although the Company experienced strong demand for its key aluminum products during the quarter, the Primary Aluminum segment entered 2014 with lower available inventories than in the comparable 2013 period.