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Alcoa earnings beat expectations, shares leap
[NEW YORK] US aluminum and metals giant Alcoa, in the process of splitting into two companies, reported second-quarter earnings Monday that topped market forecasts, sending shares sharply higher.
Though second-quarter net income of US$135 million was down 3.6 per cent from a year ago, the company posted adjusted earnings of 15 US cents per share, well above the consensus 10-cent estimate.
Alcoa reported after the market closed, marking an upbeat start to the quarterly earnings season. Its shares, which had gained 3.3 per cent Monday, jumped further in after-hours trade.
Wall Street's second-quarter earnings season outlook is murky amid a slowing global economy. According to S&P Global, earnings per share of the S&P 500 companies are expected to decline 5.4 per cent compared with last year.
For Alcoa, the continued fall in aluminum prices sent revenues down 10.2 per cent from the 2015 at US$5.29 billion. But that was better than the US$5.20 billion expected.
Alcoa kept its 2016 forecasts unchanged, saying it expects global demand to rise five per cent, much faster than supply.
"As markets ever more rapidly evolve, we have made Alcoa increasingly agile; results continue to improve," said Klaus Kleinfeld, Alcoa chairman and chief executive, in a statement.
Mr Kleinfeld said the plan to divide Alcoa into one company focused on commodity products and a second focused on value-added products for the aerospace and auto industries remained "on track for later this year".
The split-up is aimed at better reflecting the Alcoa's increasing focus on metals and specialty products for the aerospace industry.