Market Overview

Alcoa Jumps After Beating Estimates (AA)


Alcoa (NYSE: AA) has reported a higher-than-expected Q3 EPS of $0.11 versus the Street estimate of $0.06.

Revenue came in at $5.77 billion versus the Street prediction of $5.63 billion. Despite the earnings beat, sales were still down one percent year-over-year.

Investors responded positively to the news. Alcoa is currently up more than two percent in after hours trading.

"Our performance this quarter shows our repositioning of the Company is on the right path," Klaus Kleinfeld, Alcoa Chairman and Chief Executive Officer, said in a company release. "We continued to build our value-add businesses, capturing demand for innovative material solutions across multiple markets.

"Our commodity business delivered better performance in a tougher market environment, and we continued to reshape the portfolio to lower the cost base. Across the board, productivity was exceptional – achieving our full year target in the first nine months."

Alcoa also reaffirmed its belief that global aluminum demand would increase seven percent this year.

On a per-industry basis, the company expects the demand to increase nine to 10 percent from the aerospace industry, one to four percent from automobiles, one to two percent for packaging, four to five percent for commercial building and construction, and three to five percent for the industrial gas turbine industry.

In August, Alcoa announced that was breaking ground on a $275 million expansion of its Tennessee operations. At the time the company projected that aluminum demand could double by 2025.

Today's share improvement comes at a time when Alcoa has suffered a number of significant declines. Year-to-date, shares of Alcoa are down more than 11 percent. The company has dropped more than 17 percent over the last two years. This has contributed to the decline of the stock, which has fallen more than 38 percent since October 8, 2010.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ

Posted-In: Alcoa Klaus KleinfeldEarnings News


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