UPDATE 2-Alcoa sees brighter 2013, but remains cautious

Wed Jan 9, 2013 3:53am IST

Related Topics

Stocks

   

* Q4 EPS $0.06 v Street-view $0.06

* Revenue down 1.5 percent at $5.89 billion

* Shares up 1.3 percent at $9.21 in aftermarket trade

Jan 8 (Reuters) - Alcoa Inc, the largest aluminum producer in the U.S., expressed cautious optimism that demand for the metal will continue to grow in 2013, helped in part by global growth in the aerospace and construction markets.

The company posted a fourth-quarter profit on Tuesday, in line with Wall Street expectations, and handily beat expectations on revenue, helping calm investors' nerves after a rocky 2012.

"I'm more optimistic that 2013 is a year with upside potential compared to where we came from," Alcoa Chief Executive Klaus Kleinfeld told CNBC on Tuesday.

Shares of Alcoa rose 1.3 percent in after-hours trading, as investors were buoyed by Alcoa's turn to profit.

Analysts breathed a sigh of relief from the results of the first S&P 500 company to report fourth-quarter results, hoping it was a sign of things to come.

"I think it was a good solid quarter. Not a barnburner but a good quarter," said Tim Ghriskey, chief investment officer at Solaris Asset Management in Bedford Hills. "It's certainly important in this type of environment to look at revenues."

Investors tend to scrutinize Alcoa's results for hints on where the overall economy is headed, as the company's aluminum products are used in the automotive, appliance and airline industries.

The company said it expects global aluminum consumption growth of 7 percent in 2013, up slightly from 6 percent in 2012. Alcoa continues to forecast a doubling of global aluminum demand between 2010 and 2020.

Alcoa forecasts global growth in the aerospace, automotive and construction markets, among other industries, in 2013.

PROFIT IN LINE

The earnings were a positive turn for Alcoa, whose core business of mining bauxite and producing aluminum has been hit in recent years by a persistently low metal price.

For the fourth quarter, the company reported net income of $242 million, or 21 cents per share, compared with a net loss of $191 million, or 18 cents per share, in the year-ago period.

Excluding one-time items, net income was $64 million, or 6 cents per share, in line with average analysts' expectations of 6 cents a share on revenue of $5.6 billion, according to Thomson Reuters I/B/E/S.

Sales were $5.89 billion, beating analysts' expectations, but down 1.5 percent from the year-ago quarter as the average realized price per tonne of aluminum fell slightly.

Alcoa trimmed costs by 12 percent in the fourth quarter, due in part to fewer restructuring expenses.

The company's realized price for aluminum fell roughly 11 percent in 2012.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Economic Pulse

Economic Pulse

New govt promises low and stable tax regime for economic revival.  Full Article 

Global Growth

Global Growth

IMF cuts outlook, warns of stagnation risk in rich nations  Full Article 

Market Eye

Market Eye

Nifty retreats from record highs on profit taking.  Full Article 

Waning Enthusiasm

Waning Enthusiasm

Markets' post-election enthusiasm lost on consumers.  Full Article 

Banking Sector

Banking Sector

Banks not allowed to trade in bonds for infra lending - RBI.  Full Article 

Gold Imports

Gold Imports

Govt has no proposal to reduce gold import duty.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage