Alcoa Earnings: Revenue ACCELERATES Past Estimates

S&P 500 (NYSE:SPY) component Alcoa Inc. (NYSE:AA) reported its results for the second quarter. 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 Inc. Earnings Cheat Sheet

Results: Reported a loss of $2 million (0 cents per diluted share) in the quarter. Alcoa Inc. had a net income of $322 million or 28 cents per share in the year-earlier quarter.

Revenue: Fell 8.8% to $6.01 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Alcoa Inc. reported adjusted net income of 6 cents per share. By that measure, the company fell in line with the mean estimate of 6 cents per share. It beat the average revenue estimate of $5.81 billion.

Quoting Management: “Alcoa maintained revenue strength and solid liquidity by driving high profitability in our mid and downstream businesses and by reducing costs and improving performance in our upstream businesses,” said Klaus Kleinfeld, Chairman and CEO. “Although aluminum prices are down, the fundamentals of the aluminum market remain sound with strong demand and tight supply, and Alcoa is successfully capitalizing on accelerating demand in high-growth end markets such as aerospace and automotive.”

Key Stats:

A year-over-year revenue decrease last quarter snaps a streak of four consecutive quarters of revenue increases. The best quarter in that span was the second quarter of the last fiscal year, which saw revenue rise 27%.

The company met estimates last quarter after topping forecasts in the previous quarter with net income of 10 cents versus a mean estimate of a loss of 4 cents per share.

Last quarter, the company reported a net loss that marked a turn from the previous quarter’s profit. The company booked a profit of $191 million, or 16 cents per share, in the fourth quarter of the last fiscal year.

Looking Forward: Over the past ninety days, the average estimate for the third quarter has fallen from 20 cents per share to 12 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. For the fiscal year, the average estimate has moved down from 59 cents a share to 47 cents over the last sixty days.

Competitors to Watch: Aluminum Corp. of China Ltd., Norsk Hydro ASA, Kaiser Aluminum Corp., Alumina Limited, Noranda Aluminum Holding Corp., Century Aluminum Company, Empire Resources, Inc., Kombinat aluminijuma AD Podgorica, and Egypt Aluminum Company.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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