Alcoa Profit Beats Estimates After Automakers Buy More Aluminum
By Sonja Elmquist - Jul 9, 2012 4:11 PM ET
Alcoa Inc. (AA), the largest U.S. aluminum producer, reported second-quarter earnings and revenue that beat analysts’ estimates after an increase in orders from the auto and aerospace industries.
The company lost $2 million, compared with net income of $322 million a year earlier, New York-based Alcoa said today in a statement. Profit excluding a restructuring charge and other items was 6 cents a share, compared with the 5-cent profit that was the average of 19 estimates compiled by Bloomberg. Sales fell to $5.96 billion from $6.59 billion, exceeding the $5.81 billion average of 11 estimates.
Alcoa, whose customers include Ford Motor Co. and Toyota Motor Corp., is benefiting as car and truck makers are being compelled by regulations to produce lighter vehicles. The U.S. aluminum industry will ship 16 percent more aluminum to automakers in 2012 as car output climbs 11 percent, according to Lloyd O’Carroll, an analyst at Davenport & Co. in Richmond, Virginia. Aircraft manufacturers also face record backlogs as airlines hurry to refurbish aging fleets.
“In their downstream business and midstream business, those two pieces we are seeing margin expansion,” Brian Yu, a San Francisco-based analyst at Citigroup Inc. who recommends holding Alcoa’s shares, said in a July 6 interview. “It’s a sign that, yes, the company is doing some things right.”
Aluminum for delivery in three months on the London Metal Exchange averaged $2,019 a metric ton in the quarter, 23 percent less than a year earlier.
more:
http://www.bloomberg.com/news/2012-07-09/alcoa-profit-beats-estimates-after-automakers-buy-more-aluminum.html
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