Alcoa Inc (NYSE:AA) kicked off the second-quarter earnings season with a bang, posting strong earnings per share of 7 cents excluding special items. Analysts were expecting the aluminum maker to report earnings of 6 cents per share, which would have been flat with the same quarter a year ago. The company posted net losses of $119 million or 11 cents per share, which includes $195 million in special items.
Shares of Alcoa Inc (NYSE:AA) rose more than 1 percent during the regular trading day ahead of the earnings report. After the results were released, the stock rose as much as 1.5 percent in after-hours trading.
Continued from part one... Q1 hedge fund letters, conference, scoops etc Abrams and his team want to understand the fundamental economics of every opportunity because, "It is easy to tell what has been, and it is easy to tell what is today, but the biggest deal for the investor is to . . . SORRY! Read More
Alcoa’s Latest Results
The special items listed in Alcoa Inc (NYSE:AA)’s second quarter report were due to restructuring and “a legacy legal matter.” The company saw productivity gains in all of its business segments and set a new record for performance in its Engineered Products and Solutions division. The company reported that in the first half of this year, its value-add business made up for 57 percent of its total revenues and 80 percent of its segment after-tax operating income.
“Our businesses showed remarkable operating performance in the quarter with solid free cash flow,” said Alcoa Inc (NYSE:AA) Chairman and CEO Klaus Kleinfeld in a statement. “In our value-add businesses we reached another milestone with record profitability in our downstream business while acting decisively to defy the headwinds of falling metal prices in our upstream businesses.”
Alcoa Projects Continued Growth
The company projected 7 percent global aluminum demand growth this year and mostly balanced alumina and aluminum markets. The company also expects to see growth in its end markets, including between 9 and 10 percent growth in the aerospace industry and between 1 and 4 percent growth in the automotive industry. It also projects 3 to 8 percent growth in commercial transportation, 1 to 2 percent growth in packaging, 4 to 5 percent growth in building and construction and 3 to 5 percent growth in industrial gas turbines.
Analysts have been concerned about Alcoa Inc (NYSE:AA)’s results because of soft global aluminum prices. The company’s efforts to push growth in these end markets are an important key to its ability to stay strong even when aluminum prices are down.