NEW YORK CITY (dpa-AFX) - Alcoa Inc. (AA), the largest producer of aluminum in the US, Monday reported a decline in profit for the second quarter, as sales dropped 10 percent reflecting low aluminum prices. Nevertheless, both the earnings and revenues trumped Wall Street analysts' estimates, sending its shares up by a near 4 percent in the after-hours trading.
New York-based Alcoa's second-quarter profit dropped to $135 million or $0.09 per share from $140 million or $0.10 per share last year.
Adjusted earnings declined to $0.15 per share from $0.19 per share last year. Analysts polled by Thomson Reuters expected earnings of $0.10 per share. Analysts' estimates typically exclude special items.
Sales for the quarter dropped 10 percent to $5.30 billion from $5.90 billion last year. Analysts had a consensus revenue estimate of $5.20 billion for the quarter.
Growth in revenues were affected by lower aluminum and alumina pricing and the impact of curtailed, divested and closed operations. However, the decline in revenues were partially softened by strong organic growth combined with recent acquisitions.
Alcoa's earnings report are closely watched by investors as it's one of the first major companies to report quarterly results and unofficially kicks starts the earnings season.
The company is on track to complete its separation in the second half of 2016, Alcoa said in a statement. Last year, Alcoa announced its decision to separate into two companies-- a higher-margin manufacturing operations and a smelting and refining business.
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 had been suffering from declining aluminum prices caused by a glut.
AA closed Monday's trading at $10.14, up $0.32 or 3.26%, on the NYSE. The stock further rose $0.39 or 3.85% in the after-hours trade.
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