Alcoa earnings as expected, revenue tops forecasts
Alcoa Inc. said Tuesday that fourth-quarter profit met Wall Street's expectations, and it sees slightly higher demand for aluminum this year.
Net income was $242 million, or 21 cents per share, including one-time gains such as income from selling a hydroelectric project in Tennessee and North Carolina.
Without those gains, the company would have made 6 cents per share — exactly what analysts expected, according to FactSet — on revenue of $5.9 billion. Sales were higher than the $5.58 billion that analysts predicted.
A year ago, New York-based Alcoa posted a fourth-quarter loss of $191 million, or 18 cents per share, on revenue of $5.99 billion.
Alcoa, with a North Shore corporate center and technical center in New Kensington, is the first company in the Dow Jones industrial average to report fourth-quarter earnings. Because it makes aluminum for so many key industries, investors study Alcoa's results for clues about the health and direction of the economy.
Alcoa shares closed unchanged at $9.10. In after-hours trading following the earnings report, the stock gained 14 cents to $9.24.
The weak global economy has hurt demand for aluminum used in everything from airplanes to soda cans.
But Alcoa sees demand growing 7 percent in 2013, up from a 6 percent gain in 2012. The best prospects are in aerospace, with 9 to 10 percent growth expected, the company said, while less improvement is expected in autos, packaging, and building and construction materials.
Still, with a pickup in homebuilding and other factors, a 1 to 2 percent rise in demand for aluminum used in construction is forecast in North America.
“This is, in my view, the most positive surprise,” CEO Klaus Kleinfeld said during a conference call with financial analysts. Globally, construction sales growth of 4 to 5 percent is projected. The company said it hit record profits in its aluminum-rolling and product-making businesses while cutting costs in its mining and refining or “upstream” segment.
Kleinfeld said the company overcame volatile aluminum prices and global economic weakness and was in “strong position to maximize profitable growth” in 2013.
“The metal price helped out,” said Kuni Chen, an analyst at CRT Capital Group in Stamford, Connecticut, who recommends buying the shares. “They're meeting their revenue growth goals in the downstream.”
Separately, the company announced that chief financial officer Charles D. McLane Jr., 59, will retire and be replaced by William F. Oplinger, the chief operating officer of Alcoa's primary-products business unit. The change will happen April 1.
Alcoa also noted in its earnings release that it hasn't reached a settlement with the Department of Justice and Securities and Exchange Commission, regarding their investigations of bribery allegations made by a Bahrainian aluminum maker.
Alcoa in October said it agreed to an $85 million settlement of a lawsuit filed by Aluminium Bahrain BSC, known as Alba, and litigated in U.S. District Court in Pittsburgh.
If the company can't reach an agreement through negotiations with the federal entities, “Alcoa will proceed to trial with the DOJ and the SEC and under those circumstances is unable to predict an outcome or to estimate its reasonable possible loss,” the company said.
The Associated Press and Trib Total Media staff writer Kim Leonard contributed to this report. She can be reached at 412-380-5606 or email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Pittsburgh’s tech startup activity rates last of 40 metro areas in report
- Floating homes offer ‘affordable’ option in San Francisco area
- After years of downsizing, big houses make comeback
- Corporate America speaking out on social issues, getting results
- New J.C. Penney CEO comes from middle-income America
- How to land that 1st job after college
- Truffle dogs sniff out pungent fungus prized by foodies
- Importance stressed of securing your online banking
- Aetna to buy rival Humana for $35B
- Pending home sales in U.S. climb to 9-year high
- McDonald’s localizes menus to battle growing competition