Alcoa Inc. Earnings Cheat Sheet: Margins Expand For Fifth Straight Quarter, Net Income Rises

S&P 500 (NYSE:SPY) component Alcoa Inc. (NYSE:AA) reported higher profit for the third quarter as revenue showed growth. Alcoa is a global producer of aluminum. It is mainly engaged in the production and management of primary aluminum, fabricated aluminum, and alumina combined. It is actively involved in a range of industries, including technology, mining, smelting, and recycling.

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Alcoa Earnings Cheat Sheet for the Third Quarter

Results: Net income for the aluminum company rose to $172 million (15 cents per share) vs. $61 million (6 cents per share) in the same quarter a year earlier. This is a more than twofold rise from the year earlier quarter.

Revenue: Rose 21.4% to $6.42 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: AA fell short of the mean analyst estimate of 23 cents per share. Analysts were expecting revenue of $6.31 billion.

Quoting Management: “Aluminum prices fell in the third quarter, but most markets continued to grow,” said Alcoa Chairman and CEO Klaus Kleinfeld. “With the exception of Europe, we saw growth in our end markets, though at a slower rate than in the first half, as confidence in the global recovery faded.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 1.1 percentage points to 17.6% from the year earlier quarter. Over that span, margins have grown on average 3.3 percentage points per quarter on a year-over-year basis.

Revenue has risen the past four quarters. Revenue increased 27% to $6.58 billion in the second quarter. The figure rose 21.9% in the first quarter from the year earlier and climbed 4% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now fallen short of estimates in the last two quarters. In the second quarter, it missed expectations by 2 cents with net income of 32 cents versus a mean estimate of net income of 34 cents per share.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the fourth quarter is 23 cents per share, down from 34 cents ninety days ago. At $1.10 per share, the average estimate for the fiscal year has fallen from $1.27 ninety days ago.

Competitors to Watch: Aluminum Corp. of China Ltd. (NYSE:ACH),  Kaiser Aluminum Corp. (NASDAQ:KALU), Alumina Limited (NYSE:AWC), Noranda Aluminum Holding Corp. (NYSE:NOR), Century Aluminum Company (NASDAQ:CENX), AK Steel Holding Corp. (NYSE:AKS), Nucor Corporation (NYSE:NUE), United States Steel Corp. (NYSE:X), Arcelor Mittal (NYSE:MT) and POSCO (NYSE:PKX).

Stock Performance: Shares of AA were up 2% from the previous close.

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(Source: Xignite Financials)