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

S&P 500 (NYSE:SPY) component Alcoa, Inc. (NYSE:AA) reported higher profit for the second quarter as revenue showed growth. Alcoa Inc. 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 Second Quarter

Results: Net income for the aluminum company rose to $322 million (28 cents per share) vs. $136 million (13 cents per share) in the same quarter a year earlier. This is a more than twofold rise from the year earlier quarter.

Revenue: Rose 27% to $6.58 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: AA reported net income from continuing operations of 32 cents per share. This falls in line with the mean estimate of 32 cents per share. It beat the average revenue estimate of $6.32 billion.

Quoting Management: “We turned in another strong quarter, with solid revenue and earnings growth,” said Alcoa Chairman and CEO Klaus Kleinfeld. “Across the Company, our team is delivering outstanding results through our constant focus on execution and by reinventing what customers believe is possible through innovation. “Although the economic recovery is uneven, the overall outlook for Alcoa – and for aluminum – remains positive,” Kleinfeld said. “Demand for aluminum continues to rise and so does growth in our major markets. These factors support our projection that aluminum demand will grow 12 percent this year and will double by 2020.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 1.5 percentage points to 20.3% from the year earlier quarter. Over that span, margins have grown on average 5.5 percentage points per quarter on a year-over-year basis.

The company has now topped analyst estimates for the last four quarters. It beat the mark by one cent in the first quarter, by 2 cents in the fourth quarter of the last fiscal year, and by 3 cents in the third quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 21.9% to $5.96 billion in the first quarter. The figure rose 4% in the fourth quarter of the last fiscal year from the year earlier and climbed 14.6% in the third quarter of the last fiscal year from the year-ago quarter.

Competitors to Watch: Century Aluminum Company (NASDAQ:CENX), Alumina Limited (NYSE:AWC), Kaiser Aluminum Corp. (NASDAQ:KALU), Noranda Aluminum Holding Corporation (NYSE:NOR), and Aluminum Corp. of China (NYSE:ACH).

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(Source: Xignite Financials)

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