Alcoa Surprises Market With Q1 Profit

Alcoa Inc, the biggest U.S. aluminum producer, took market by surprise when it announced first-quarter profit following a loss during the last quarter of 2011 while international markets improved, particularly in the automobile and aerospace sectors.

Pittsburgh based Alcoa Inc, produces aluminum for beverage cans, cars and aircraft. The company increased its international 2012 growth forecast for the auto industry to 3 -7 percent and the aerospace market to 13 – 14 percent.

The company also predicts international aluminum supply shortfall during 2012. Global aluminum requirement to grow by 7 percent, in addition to the 10 percent increase seen during 2011.

Revenue increased to $6 billion. Analysts were expecting revenue of $5.77 billion and a loss of 4 cents for each share. It was for the first time that the company had beat earnings predictions by a substantial margin. Within the Dow Jones industrial average, Alcoa is the first company to announce results for the March quarter which is regarded as a bellwether for the remaining companies of the materials division.

According to the company, the improvement during the fourth quarter was mainly due to improved volume and mix, higher prices for aluminum as well as solid productivity improvements.

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Leo Pierson

About Leo Pierson

Former partner in a real estate management firm, Leo, has been active in the market for the last 8 years. Ex-blogger on penny stocks, now focused on long term growth stocks, Leo provides valuable market snapshots each day as part of our editorial team.

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