Alcoa's Q3 Results, 2016 Guidance Look Disappointing

Alcoa Inc AA reported lower than estimated revenue for the third quarter and provided a tepid outlook for demand for the remainder period of the year.

The aluminum maker reported net income of $106 million, or net income attributable to Alcoa of $166 million, or $0.33 a share. In comparison, the company earned $44 million, or $0.06 a share, in the year-ago period. Analysts' expected $0.12 a share.

Adjusted EPS came in at $0.32 on sales of $5.2 billion.

Alcoa's sales fell from $5.57 billion to $5.21 billion thus missing the estimates of $5.33 billion. Sequentially too, sales fell from $5.3 billion.

Related Link: Will This Be The 5th Straight Quarter Of An S&P 500 Earnings Decline?

Chairman and CEO Klaus Kleinfeld commented, "Alcoa Corporation segments have met or exceeded their respective 2016 global cost curve goals. The aluminum business now sits at the 38th percentile – from the 51st percentile in 2010, 43rd in 2013 - and the alumina business has moved down to the 17th percentile – from the 30th percentile in 2010, 27th in 2013."

Going forward, Alcoa reduced its Global Rolled products revenue forecast from $5.0-$5.2 billion to $4.8-$5.0 billion for full year 2016. Similarly, the company slashed its revenue expectation from Engineered products and Solutions from $5.9-$6.1 billion to $5.6-$5.8 billion. Transportation and Construction solutions revenue is expected to be $1.7-$1.8 billion compared to its earlier guidance of $2.1 billion.

The stock dropped $1.21, or 3.84 percent, to $30.30 in pre-market trading.

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Posted In: EarningsNewsGuidanceMovers
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