Alcoa Inc Beats Earnings Estimates, Shares Rise

Alcoa Inc Beats Earnings Estimates, Shares Rise
By Alcoa ( [Public domain], via Wikimedia Commons

Alcoa kicked off fourth quarter earnings season with a bang, beating Wall Street’s estimates with earnings of 33 cents per share or $432 million, excluding items. Sales for the fourth fiscal quarter were $6.4 billion, a 14% year over year increase.

Analysts had been expecting the aluminum maker to post earnings of 28 cents per share on $6.04 billion in revenue. In the same quarter last year, Alcoa reported earnings of 4 cents per share or $40 million on $5.59 billion in revenue.

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Key metrics from Alcoa’s earnings report

Including special items related to previously-announced restructuring plans in the company’s upstream and midstream businesses, Alcoa’s reported earnings were 11 cents per share or $159 million. In the same quarter last year, the company posted a net loss of $2.19 per share of $2.3 billion.

For the full year, the aluminum maker posted net income of 21 cents per share or $268 million. Excluding items, earnings were 92 cents per share or $1.1 billion, compared to $759 million in 2013. Revenue for the full year was $23.9 billion, a 4% year over year increase. Alcoa said 2014’s results were the strongest full-year operating results since 2008.

Alcoa’s earnings by segment

Alcoa management attributed the company’s strong revenue results to higher sales in its value-add businesses in both the mid-and downstream, as well as improving prices for metal and energy sales.

The company’s Engineered Products and Solutions segment saw its 19th consecutive quarter of growth in after-tax operating income, excluding the Firth Rixson acquisition. Alcoa’s Global Rolled Products division saw continued benefits from the shift toward vehicles made with more aluminum and shipped a record volume of sheet for the automotive sector during the quarter.

The company reported that within its Global Primary Products division, its Alumina segment saw its profitability more than double. The Primary Metals segment, which is also part of Global Primary Products, saw its strongest adjusted EBITDA per metric ton since the second quarter of 2008.

Alcoa projects 2015 end market

In tonight’s earnings release, Alcoa also provided an update on expectations for this year. The aluminum maker expects to see another strong year for sales in its global aerospace products, projecting a 9% to 10% year over year increase. In automotive, Alcoa projects a 2% to 4% increase, while in global commercial transportation production, the company expects to see between a decline of 1% to a gain of 3%.

In packaging, Alcoa expects to see 2% to 3% growth, while in building and construction, the company expects sales growth of between 5% and 7% for this year. In industrial gas turbines, the aluminum maker expects to see 1% to 3% growth. Alcoa projects a 7% growth rate in global aluminum demand for this year, which is flat with 2014’s 7% growth rate.

Shares of Alcoa bounced in after-hours trading, rising as much as 2% after tonight’s earnings release.

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