Alcoa, the USA’s biggest aluminum producer, surprised Wall Street Wednesday by reporting a return to profitability in Q-3 after three consecutive quarters of losses, thanks to rising metal prices and aggressive cost-cutting. The results provided a positive start to the US corporate earnings season from a manufacturer that is closely watched as an early indicator of industrial earnings. Alcoa, reporting after markets closed in New York, was the 1st company in the DJIA to announce quarterly results for the three months to the end of September. Net income was US$77 M or 8 cents a share, down from US$268 M or 33 cents a share in the same period a year earlier but well ahead of analysts’ average expectations of a loss of about 10 cents per share. Revenue was US$4.6B, down from US$7.2B last year, but ahead of Wall Street forecasts.
Alcoa said the results had been boosted by an increase in its average realized price of aluminum to US$1,972 per metric tonne, down one-third from last year but up from US$1,667 per metric tonne in the Q-2 of this year.
Klaus Kleinfeld, Alcoa’s president and chief executive, said US demand for aluminum was stabilizing. He said programs such as the US’s cash-for-clunkers scheme, in which governments encouraged drivers to trade in older vehicles for discounts on new cars, had been “a main driver of stabilization”. Paul A. Ebeling, Jnr www.livetradingnews.com
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