Alcoa Inc. (AA), the largest U.S. aluminum producer, reported third-quarter profit that surpassed analysts' expectations after higher earnings from one of its divisions that turns the metal into auto and aerospace parts. <\/p>\n
Net income was 2 cents a share, compared with a 13-cent loss a year earlier, the New York-based company said in a statement today. Earnings excluding one-time items were 11 cents a share, beating the 5-cent average of 17 estimates compiled by Bloomberg. Sales fell to $5.77 billion from $5.83 billion, exceeding the $5.63 billion average estimate. <\/p>\n
Alcoa's so-called downstream divisions -- which make rolled, forged and extruded aluminum products -- have accounted for a growing proportion of the company's revenue in the past year. They're the focus of efforts by Chairman and Chief Executive Officer Klaus Kleinfeld to capitalize on rising demand for high-tech aluminum components in the latest generation of cars and commercial aircraft. <\/p>\n
\"The end-markets for aluminum remain healthy and growing,\" Anthony Rizzuto, a New York-based analyst at Cowen & Co. who has a hold rating on the stock, said in a note before the earnings were announced. Auto and aerospace markets \"will be the primary drivers of the aluminum industry over the next decade.\" <\/p>\n
After-tax operating income from the company's engineered products division, which supplies aerospace companies Boeing Co. and Airbus SAS, rose to $192 million in the third quarter from $158 million a year earlier. <\/p>\n
While earnings at the downstream businesses have improved in 2013, earnings at its primary-metals unit, the company's largest by revenue, have come under pressure from a decline in metal prices. <\/p>\n
Alcoa, typically one of the first U.S. companies to report quarterly earnings, was removed from the Dow Jones Industrial Average on Sept. 10 after 44 years. As well as the drop in its share price so far in 2013, Alcoa's credit rating was cut to junk by Moody's Investors Service in May. <\/p>\n
Aluminum futures on the London Metal Exchange averaged $1,845 a metric ton in the quarter, down 13 percent from a year earlier. Global output has exceeded demand for a ninth straight year, according to data compiled by Bloomberg. It traded at $1,758 in June, almost a four-year low. <\/p>\n
To contact the reporter on this story: Sonja Elmquist in New York at selmquist1@bloomberg.net<\/a> <\/p>\n To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net<\/a> <\/p>\n <\/p>\n See the rest here: <\/p>\n Alcoa Earnings Top Estimates After Gains at Aerospace Segment<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Alcoa Inc. Continue reading