Metal miner Alcoa Inc. won a $1.5 billion contract from General Electric’s aviation unit to supply jet engine parts, Alcoa said Monday. Alcoa will supply GE with advanced nickel-based super alloy, titanium and aluminum components for engines and other parts.
Alcoa will reportedly make the parts in six U.S. states, as well as in France and Canada.
New York-based Alcoa had announced in September that it would split its operations into two separate entities as continued volatility in Chinese markets and falling commodity prices pushed the company’s stock price to its lowest in more than 5 years. Prices of raw aluminum have fallen over 25 percent in the past year, to about $1,500 a ton.
“We greatly appreciate GE’s continued confidence in Alcoa’s aerospace capabilities,” Alcoa CEO Klaus Kleinfeld reportedly said in the release.
A spokesman for GE reportedly said that Alcoa was “an important player” in a “historically high-production phase,” during which GE and partner companies have “a backlog of more than 15,000 commercial engines to deliver over the next several years.”
Alcoa’s fourth-quarter performance is widely anticipated to be the company’s worst since early 2014. Analysts expect revenue to drop 17 percent for the quarter while earnings are expected to fall to 2 cents a share, according to a WSJ poll.
Last week, the company announced plans to close its 269,000 ton-a-year Warrick smelter in Indiana — the largest operating smelter in the United States currently — as it was "not competitive" amid "challenging market conditions."