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TORONTO (miningweekly.com) – US aluminium and related products producer Alcoa on Tuesday reported second-quarter profit and revenue that beat Wall Street analyst expectations, sending investors into an after-market buying frenzy that pushed up its NYSE-listed stock by 2.9% to $15.28 apiece.
The New York-headquartered company ascribed its strong results for the June quarter to its continued portfolio transformation, which, in recent months, saw the largest US aluminium producer make a string of significant investments in its downstream specialist manufacturing business segments, strategically building out these manufacturing capabilities to generate increased revenues in the face of low primary-aluminium prices.
For the period, Alcoa reported net income of $138-million, or $0.12 a share, which included $78-million in special items mainly related to restructuring aimed at reducing the cost base of its commodity business. This compared with a loss of $119-million, or $0.11 a share, a year earlier.
Excluding the impact of special items, adjusted income totalled $216-million, or $0.18 a share, compared with earnings of $76-million, or $0.07 a share, in the comparable period a year earlier.
Sales held steady at $5.8-billion in the second quarter compared with the same period last year.
Analysts, on average, expected adjusted earnings of $0.12 a share, on revenue of $5.66-billion.
All Alcoa’s business segments were profitable during the quarter, with its engineered products and solutions downstream business segment, which manufactures products such as beverage can packaging, heavy-truck and trailer components and aircraft fuselages, achieving its best-ever results, delivering $204-million in after-tax operating income.
The midstream business, Global Rolled Products, continued to capture increasing demand for automotive sheet and the upstream business, comprising alumina and primary metals, reported improved performance for the eleventh consecutive quarter. Alcoa said the primary metals segment’s results reflected a more competitive business, the positive impact of energy sales and higher regional premiums owing to robust aluminium demand.
For 2014, the company saw a global aluminium deficit of 930 000 metric tons, an increase from a deficit of 730 000 metric tons estimated in the first quarter. Alcoa also expected a tightening of the alumina market, a key ingredient for making aluminium, with a surplus declining from 2.25-million metric tons in the first quarter to 824 000 metric tons in the second quarter.