Alcoa swings to profit on lower costs : Report

Alcoa Inc. swung to a third-quarter profit as the aluminum maker reported lower costs that bolstered the bottom line, though revenue fell slightly due to weaker shipments

Still, results easily topped analyst expectations

 

Still, Alcoa’s quarterly results have been closely watched, as the company is among the first major U.S. firms to report earnings for a new season

Alcoa is also considered a bellwether because it serves a broad range of industries

Alcoa’s results have been stung by flagging raw aluminum prices, as a glut of the commodity has weighed on prices of the metal

In response, the company has been cutting production costs by closing expensive smelters

Alcoa has focused more on making high-strength lightweight aluminum products for cars and planes

On Tuesday, Alcoa affirmed its forecast that global demand for aluminum will rise 7% this year

Overall, Alcoa reported a profit of $24 million, or two cents a share, compared with a prior-year loss of $143 million, or 13 cents a share

Excluding restructuring and other items, income from continuing operations rose to 11 cents a share from three cents

Revenue slid 1.2% to $5.77 billion, as shipments of aluminum products dropped 4.3%

Analysts surveyed by Thomson Reuters expected an adjusted profit of five cents a share on $5.63 billion in revenue

The cost of goods sold fell 8.9% to $4.8 billion, Alcoa reported

The company’s engineered-products-and-solutions unit, which makes small parts like screws and bolts, saw operating income rise 22% to $192 million

The primary metals division, which makes raw aluminum, reported a profit of $8 million, compared with a prior-year loss of $14 million

(END) Dow Jones Newswires