Alcoa, the largest US aluminium producer, reported earnings that beat analysts' estimates following a better-than-expected performance at its unit that supplies components to aerospace and power companies.
Profit excluding expenses related to output cuts and a legal settlement were 7 cents a share in the second quarter, Alcoa said yesterday, beating the 6-cent average of 15 estimates.
Sales fell 1.9 per cent to $5.85 billion, surpassing the $5.79 billion average of nine estimates. Alcoa’s engineered products and solutions business saw operating income rise 12 per cent from the first quarter, exceeding the 5 per cent growth forecast by the company in April.
It's boosting sales at downstream divisions as chairman and chief executive officer Klaus Kleinfeld tries to reduce reliance on aluminium smelting, which has been hurt by lower metal prices.
“Aerospace is really what’s driving engineered products,” said Lloyd O’Carroll, an analyst at Davenport and Co, who recommends buying the stock. “Revenues are growing, and growing pretty strongly. Margins are continuing to improve.”
The company, the first member of the Dow Jones Industrial Average to report quarterly results, has fallen 9.3 percent this year in New York, the worst performance on the DJIA. – (Bloomberg)
