(July 10 2012)
Alcoa, Inc. (NYSE: AA), the largest U.S. aluminum producer, reported second quarter earnings of $0.06 per share, in line with estimates (Capital IQ had earnings pegged at $0.06 per share and Thomson Reuters at $0.05 per share), and pulled in revenue of $5.96 billion, above the analyst revenue expectation of $5.83 billion.
The company reported an increase in orders from the auto and aerospace industries. Chief Executive Officer Klaus Kleinfeld reiterated Alcoa’s forecast for global aluminum demand to rise 7% this year and exceed supply.
While earnings were better-than-expected, they showed a considerable decline, year-over-year. The per-share results were 81.3% lower than a year ago. After-tax operating income was down in three of Alcoa’s four business segments from a year ago. Alcoa broke even in the quarter, on a per-share basis, when including $63 million in special items that resulted in a $2 million operating loss.
In January, Alcoa announced production curtailments to lower costs, but the benefits of such actions have yet to been realized given the downward trajectory of aluminum prices. The impact of cuts should be more apparent in the third-quarter.