Alcoa, the largest aluminium producer in the United States, beat expectations, posting a strong second-quarter profit.
Major aluminium producer raises consumption forecast
NEW YORK // Alcoa, the largest aluminium producer in the US, posted a stronger second-quarter profit than expected on Monday and raised its estimate for global aluminium consumption, sending its shares up 3 per cent. The company's results are often viewed as a bellwether of the US economy as it kicks off the earnings season. It cited strength in several industrial sectors and raised its estimate even through metal prices have been falling recently.
Alcoa shares rose to US$11.24 in extended trade after closing at $10.87 in the regular session on the New York Stock Exchange. "It's constructive and it helps start the earnings season off on a positive note," said Brian Hicks, the portfolio manager of US Global Investors. "From the standpoint of Alcoa, they see the economy continuing to expand. It's robust enough that they have to increase their forecast for global aluminium production."
Net earnings were $136 million (Dh499.5m), or 13 cents a share, compared with a loss of $454m, or 47 cents a share in the same quarter last year. Earnings from continuing operations were $137m, or 13 cents a share, and revenue rose 22 per cent to $5.2 billion. Analysts on average were expecting earnings of 11 cents a share and revenue of $5.04 billion, according to Thomson Reuters. Alcoa said there was strong revenue growth over the first quarter in several markets, in particular packaging, commercial transport and building and construction.