Alcoa is the world leader in the production and management of primary aluminum, fabricated aluminum and alumina combined, through its active and growing participation in all major aspects of the industry.
Alcoa posts Q1 earnings boost on improving demand
Aluminum producer Alcoa (NYSE:AA) late Tuesday surprised the Street with profitable first-quarter earnings after a prior-quarter loss as its global markets improved.
Alcoa is the first company in the Dow Jones Industrial Average to post earnings for the March quarter and considered a bellwether for the materials sector.
For the three months ended March 31, Alcoa said earnings came in at $94 million, or 9 cents per share, compared with a profit of $309 million, or 27 cents per share in the same quarter last year. Excluding items, earnings were 10 cents per share.
Revenue rose slightly to $6 billion. Analysts were expecting a loss of 4 cents per share on revenue of $5.77 billion, according to Thomson Reuters.
"Performance rebounded strongly this quarter due to our proactive cash sustainability actions, our relentless focus on profitable growth, and stabilizing markets," Alcoa's chairman and chief executive officer Klaus Kleinfeld said.
"We are successfully executing on our aggressive strategy to move down the cost curve in our upstream businesses, and drive to record profitability in our midstream and downstream businesses. Challenges remain in this economy, but we approach them better prepared than ever before."
Alcoa, which makes aluminum for aircraft, cars and drinks cans, also raised its 2012 global growth forecast for the aerospace market by 3 percentage points to 13 to 14 percent and said it expects global growth in the auto industry of 3 to 7 percent.
The company also sees a deficit in global aluminum supply this year and reaffirmed its forecast that global aluminum demand would grow 7 percent in 2012.
Alcoa said the improvement over the prior quarter was driven by strong productivity improvements across all businesses, higher
realized prices for aluminum, and improved volume and mix. These were offset somewhat by a lower realized alumina price and higher input costs.
A 9 percent drop in the realized price of aluminum was partially offset by third-party shipments in the upstream businesses, better volume and mix in the midstream business, and improved volume in the downstream business, Alcoa said.
Compared to the first quarter of 2011, it said revenue in its commercial transportation business was up 32 percent and aerospace revenue rose 15 percent.
The aluminum giant's stock price has fallen 46 percent since April 2011 - mostly due to lower global aluminum prices.
Aluminum prices are down almost 20 percent from a year ago but have been slowly inching higher, reaching $2,126 per tonne on March 31 from $2,020 in January.