Alcoa's Profit Rises, Revenue Grows

Driven by higher revenue, Alcoa (NYSE: AA) saw its profit increase in the third quarter. What accounts for the company's robust revenue this quarter? Let's take a look behind the numbers and see what action you should take.

Earnings and Revenue:
Alcoa's revenues topped Wall Street's expectations, though the company's EPS fell short of predictions. The company reported EPS of 15 cents/share versus the 23 cents/share estimate and revenues of $6.42 billion versus the $6.31 billion estimate. EPS rose 1% while revenue climbed 21.4% from the same period last year.
Alcoa's revenue has grown during each of the past four quarters on a year-over-year basis.

Income:
For the year, Alcoa reported net income of 96 cents/share. The company fell short of analysts' projections of $1.01/share. According to the reported number, the company's income rose 182% from last year's levels.

Conference Call:
The conference call for third quarter earnings can be accessed here.

Official Comment:
"Aluminum prices fell in the third quarter, but most markets continued to grow," said Alcoa Chairman and CEO Klaus Kleinfeld. "With the exception of Europe, we saw growth in our end markets, though at a slower rate than in the first half, as confidence in the global recovery faded."

Industry:
Alcoa is in the mining (non ferr) industry. That industry is currently enjoying price/earnings growth of 0.3%. The company's EPS compares unfavorably with its industry's estimated average of $2.49.

What to Do Next:
Now you can make a better-informed decision about whether to buy, sell or hold Alcoa shares until the next earnings announcement. Whatever you do, be sure to check back in with us before the company's next earnings release for a full prep sheet, just like the one we did here.

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