Alcoa released its latest earnings report after closing bell tonight, posting a wide miss of 7 cents per share in adjusted earnings and sales of $5.6 billion. Analysts had been expecting earnings of 14 cents per share on $5.68 billion in revenue. In last year’s third quarter, the aluminum manufacturer reported earnings of 31 cents per share and $6.2 billion in revenue.
Net income was 2 cents per share or $44 million. Sales declined 11% year over year with a 21% decline due to divestures, headwinds in the market, and closures. A 10% increase in aerospace and automotive sales and Alumina sales partially offset those declines.
Adjusted EBITDA for the Value-Add businesses was $508 million, while revenue for the segment was $3.4 billion. Alcoa recorded record sales of Engineered Products and Solutions at $1.4 billion and a 39% increase in aerospace revenue. Global Rolled Products automotive revenue climbed 133%.
Alcoa’s Upstream businesses recorded their best Alumina profitability year to date since 2007 with overall revenue for the segment of 2.2 billion and adjusted EBITDA of $329 million for the Upstream segment. The aluminum manufacturer recorded $287 million in productivity gains in the quarter and $849 million in productivity gains to date.
Alcoa adjusts outlooks
Alcoa management maintained their full year estimates for aerospace sales growth of between 8% and 9% but raised their forecast for airfoil market growth of between 3% and 4% from their previous projection of a 1% to 3% increase.
The company tightened its North American automotive production estimates to between 2% and 4% from their previous estimate of a 1% to 4% gain. It left the heavy duty truck and trailer production outlook of 9% to 11% the same and its commercial building and construction sales growth of 4 to 5% the same.
Alcoa raised its projection for European automotive production growth to an increase of 1% to 3% from the previous expected decline of 1% to 3%. In China, the company cut its automotive growth estimate from between 5% and 8% to between 1% and 2%.
The company also reaffirmed previous projections that global aluminum demand will likely increase 6.5% this year and double between 2010 and 2020. So far within these ten years, demand growth is ahead of their projection. Alcoa management also expects there to be a global aluminum deficit next year.
As of this writing, shares of Alcoa were down 4.54% at $10.51 per share.