Alcoa 3Q boosted by higher aluminum prices

DALLAS (AP) — Alcoa Inc. said Wednesday that third-quarter income soared as higher aluminum prices and lower costs for raw materials boosted its core primary-metals business.

Related Stories

Alcoa earnings beat forecasts, propelled by higher aluminum prices Reuters

[$$] Alcoa Cost Cuts, Higher Prices Lift Net The Wall Street Journal

[$$] CalAmp Revenue, Net Income Edge Up The Wall Street Journal

Alcoa opens plant to make alloys for aircraft Associated Press

Nike jumps to all-time high after results top expectations MarketWatch

The results beat Wall Street expectations, and the company's stock rose 2 percent in after-hours trading.

Alcoa has been pivoting from its traditional role of mining and smelting aluminum to become a more diversified maker of lightweight metal and alloy products for aerospace, autos and other industries. But it was the core metals business that propelled Alcoa in the third quarter.

The primary-metals segment posted operating earnings of $245 million, up from just $8 million a year earlier. The company said that costs for the raw material alumina were lower while the price of aluminum it produced rose 16 percent. Alcoa said the division also benefited from higher productivity. The company has shuttered plants and taken other steps to cut costs.

Chairman and CEO Klaus Kleinfeld said that the primary-metals segment "performed at levels not seen since before the downturn" in 2008.

The New York-headquartered company has been increasing its focus on supply the aerospace industry and is benefiting from demand for aluminum and other lightweight materials used to make planes more fuel-efficient. Alcoa's engineered-products division had a quarterly record with operating income of $209 million, up 9 percent, and its rolled-products segment earned $103 million, a 45 percent gain.

Alcoa is having a good run. Recently, it announced contracts of at least $1 billion each to supply Boeing Co. and jet engine maker Pratt & Whitney. Last week, Alcoa opened what it touted as the world's biggest aluminum-lithium plant in Indiana to make parts for aerospace.

Can the company keep rolling? Kleinfeld thinks so. During a conference call, he pointed to several years of backlogs at aircraft manufacturers and predicted aerospace sales gains of 8 to 9 percent this year. He said an aging fleet should raise demand for new vehicles in North America, and a rising middle class in China will want more cars.

Overall, net income was $149 million, or 12 cents per share, compared with $24 million, or 2 cents per share, a year ago. Excluding charges for restructuring and acquisitions, the company said that adjusted earnings were 31 cents per share. Analysts, who usually exclude items, expected 22 cents per share, according to FactSet.

Revenue rose 8 percent to $6.24 billion, topping the $5.86 billion forecast of analysts.

Although Alcoa was dropped from the Dow Jones industrial average last year, it remains the unofficial opening act of earnings season. Its results are watched closely because of its role as a supplier of basic materials to many industries.

Shares of Alcoa rose 12 cents to close at $16.07, up 51 percent so far in 2014. In after-hours trading after the earnings report, the shares were up another 33 cents to $16.40.

Copyright and Exemption Declaration :¢ÙAll articles, pictures and videos that are marked with "China Aluminum Network" on this website are copyright and belong to China Aluminium Network (www.alu.com.cn). When transshipment, any media, website or individual must list the source from "China Aluminium Network (www.alu.com.cn)". We seek legal actions against anyone that disobey this. ¢ÚArticles that marked as copy from others are for transferring more information to readers, do not represent or endorse their opinions or accuracy and reliability. When other media, website or individuals copy from our website, must keep the source. Anyone that changes the articles' sources will hold the responsibilities for copyright and law problems. We also seek legal actions against anyone that disobey this. ¢ÛIf any articles copied by our website concern the copyright and other problems, please contact us within one week.