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Alcoa Q3 Earnings Miss Expectations, Shares Slide

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Shares of Alcoa Inc (NYSE: AA) dropped over 4 percent in after-hours trading after the company reported weaker-than-expected earnings for its third quarter.

The New York-based company posted quarterly net income of $44 million, or $0.02 per share, compared to $149 million, or $0.12 per share, in the year-ago quarter. Excluding special items, the company's earnings slipped to $0.07 per share from $0.31 per share.

Its revenue dropped around 11 percent year-over-year to $5.57 billion. However, analysts were expecting earnings of $0.15 per share on revenue of $5.69 billion.

The average estimate among 173 Estimize users was for earnings of $0.16 per share and revenue of $5.73 billion.

Alcoa's combined upstream businesses posted revenue of $2.2 billion for the quarter.

After-tax operating profit for Engineered Products and Solutions segment declined $4 million year-over-year to $151 million in the quarter, while ATOI for Transportation and Construction Solutions segment slipped $6 million to $44 million. Global Rolled Products ATOI in the third quarter declined $7 million to $62 million, while Alumina segment ATOI jumped $150 million year-over-year to $212 million in the latest quarter.

"The third quarter brought economic headwinds and significant volatility in some of our markets," said Klaus Kleinfeld, Chairman and Chief Executive Officer. "We continue to be laser focused on the things we can control. We have successfully made our Upstream businesses less vulnerable to commodity downswings. We have intensified innovation and growth in the Value-Add businesses, and it shows through the solid underlying performance despite currency movements and market fluctuations. Our productivity performance was strong combined with good cash generation. While we cannot control external factors, we do remain focused on what we can control—making our businesses more resilient."

In its global end markets, the company maintained 2015 guidance for global aerospace sales growth of 8 percent to 9 percent. In industrial gas turbines, the company lifted its outlook for global airfoil market growth to 3 percent to 4 percent, compared to 1 percent to 3 percent growth.

In North America, the company now expects 2015 automotive production to rise 2 percent to 4 percent, versus 1 percent to 4 percent growth. For 2015, Alcoa maintained its outlook for heavy duty truck and trailer production growth of 9 percent to 11 percent.

Alcoa shares fell 4.09 percent to $10.56 in the after-hours trading session.

 

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