NEW YORK CITY (dpa-AFX) - Alcoa, Inc. (AA), the largest U.S. aluminum producer, said Tuesday after the markets closed that it swung to a second quarter profit, as all its four business segments were profitable during the quarter.
The company's quarterly earnings per share, excluding items, also came in above analysts' expectations as did its quarterly sales.
'Our second quarter results prove Alcoa's transformation is in high gear,' said Klaus Kleinfeld, Alcoa Chairman and Chief Executive Officer. 'We are taking the downstream business to new profitability heights, capturing midstream demand as auto lightweighting accelerates, while continuing to relentlessly improve upstream performance.'
Alcoa also reaffirmed its forecast of global aluminum demand growth of 7% for 2014.
Alcoa shares are currently gaining 0.94% in after hours trading after closing the day's regular trading session at $14.85, up 11 cents. The shares trade in a 52-week range of $7.68 to $15.18.
Alcoa was among the companies that were hit most during the recession. The company cut more than 20,000 jobs and closed plants in the U.S. and Europe to tide over the global economic slowdown. Like other aluminum producers, the company is currently suffering from declining aluminum prices cuased by a glut. Alcoa has taken steps to cut costs and reallign production in order to remain competitive.
Alcoa was replaced by Nike, Inc. (NKE) on the Dow Jones Industrial Average Index last year. However, it is s still among the first major U.S. companies to report earnings for a new season and is considered a bellwether.
Alcoa's Alumina segment reported an after-tax operating income, or ATOI, of $38 million for the second quarter, down 41% from a year earlier. Alumina production totaled 4,172 kmt in the first quarter, up from 3,994 kmt in the first quarter of last year.
The company's Primary Metal segment reported a second quarter after-tax operating income of $97 million, compared to an after-tax operating loss of $32 million last year.
Second quarter ATOI for the company's Global Rolled Products segment remained flat with last year at $79 million.
Second quarter ATOI from the company's Engineered Products and Solutions segment rose 6% year-over-year to a record $204 million.
For the second quarter ended June 30, 2014, the company reported reported net income of $138 million or $0.12 per share, compared to a net loss of $119 million or $0.11 per share for the year-ago quarter.
The latest quarter results include $78 million in special items largely tied to a previously announced restructuring aimed at reducing the cost base of the company's commodity business.
Excluding items, adjusted net income for the second quarter was $216 million or $0.18 per share, compared to $76 million or $0.07 per share in the prior year quarter.
On average, 17 analysts polled by Thomson Reuters expected the company to earn $0.12 per share for the second quarter. Analysts' estimates typically exclude special items.
Net sales for the second quarter was $5.84 billion, down slightly from $5.85 billion in the same quarter last year. Twelve analysts had a consensus revenue estimate of $5.66 billion for the second quarter.
Late last month, Alcoa agreed to buy British aerospace parts maker Firth Rixson Ltd. from its US-based private-equity owner Oak Hill Capital Partners in a cash and stock deal valued at $2.85 billion. The deal, which is expected to close by the end of 2014. is projected to contribute $1.6 billion in incremental revenues in 2016.
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