Alcoa Inc (NYSE:AA) kicked off third quarter earnings season tonight after closing bell, reporting net income of 2 cents per share and net income of 11 cents per share excluding special items. The company’s revenue for the quarter was $5.8 billion, coming out strong in spite of weaker aluminum prices during the quarter.

Alcoa

This was the first earnings release since Nike Inc (NYSE:NKE) replaced Alcoa Inc (NYSE:AA) on the Dow Jones Industrial Average.

Alcoa shares surge on results

Analysts had been expecting the company to report earnings of 5 to 6 cents per share on revenue of $5.7 billion for the September quarter. In the same quarter a year ago, the aluminum maker reported earnings of 3 cents on revenue of $5.8 billion. As soon as the results were announced, shares of Alcoa Inc (NYSE:AA) surged more than 3 percent in after-hours trading.

The company’s items included $109 million in after-tax charges related to restructuring “to improve upstream competitiveness.” Other special items during the September quarter included an insurance recovery from a March 2012 fire at its Massena, New York location and a positive impact of mark to market changes on some energy contracts.

Alcoa’s results bolstered by value-add businesses

Chairman and CEO Klaus Kleinfeld attributed the company’s strong performance to growth in their value-add businesses.

“We continued to build our value-add businesses, capturing demand for innovative material solutions across multiple markets,” he said in a statement. “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 Inc (NYSE:AA) reported that in the first three quarters of this year, its value-add businesses, including Engineered Products and Solutions and Global Rolled Products, made up 57 percent of its total revenues and 79 percent of segment after-tax operating income.

Analysts increasingly bearish on Alcoa ahead of earnings

Leading into earnings, analysts from more than one firm actually downgraded Alcoa Inc (NYSE:AA). Morgan Stanley downgraded the company from Overweight to Equal Weight, expecting aluminum prices to fall. Deutsche Bank analysts actually downgraded the aluminum maker to Sell late last week, also citing weak aluminum prices. JPMorgan analysts also cut their estimates for the quarter from 12 cents to 5 cents per share ahead of the report. Looks like they were quite wrong about Alcoa this time around.