Alcoa Inc., suffering under the weight of a global aluminum glut, reported earnings that missed analysts’ estimates after the price of the metal fell for a fourth straight quarter.
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Net income attributable to Alcoa fell to $44 million, or 2 cents per share, in the third quarter ended September 30 from $149 million, or 12 cents per share, a year earlier.
Analysts on average had expected Alcoa to earn 13 cents per share on sales of $5.65 billion, according to Thomson Reuters I/B/E/S. Finally, Sterne Agee CRT reissued a “neutral” rating and issued a $12.00 target price on shares of Alcoa in a research report on Wednesday, July 8th.
The analysts are expecting the aluminum provider to have 3QFY15 earnings per share (EPS) of $0.13.
Alcoa faced “economic headwinds and significant volatility in a few of our markets” during the quarter, said chief executive Klaus Kleinfeld. During the same period in the previous year, the business posted $0.31 earnings per share.
Revenue fell 11 percent to $5.57 billion. However, the decline in revenues were softened by strong organic growth in aerospace, automotive and alumina business, combined with acquisitions.
Excluding special items, third quarter 2015 net income was $109 million, or $0.07 per share, led by strong productivity gains and solid midstream and downstream profitability, offset by lower metal prices. We have successfully made our Upstream businesses less vulnerable to commodity downswings.
Last week, Alcoa announced that it will break up into the Upstream Company, involved in mining, and the Downstream Company, engaged in getting products into industrial clients’ hands.
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As a result, following Alcoa’s modest gains in regular-day trading Thursday and a big 20+ percent surge over the past week, shares have fallen off roughly 4.3 percent in after-hours trading as of this posting. And as a major global player in commodities, its comments about aluminum demand and China’s economy will be closely watched. The moves reduced the company’s capacity to make aluminum to about 3.9 million tons at the end of 2014. The Company operates in four segments: Alumina, Primary Metals, Global Rolled Products, and Engineered Products and Alternatives. Investors see profit of companies in the Standard & Poor’s 500 to fall 5%, says S&P Capital IQ. Earlier this month, Alcoa announced an approximately $1.1 billion contract with Lockheed Martin that draws on new titanium capabilities gained through RTI.
