Alcoa's (AA) Q2 Earnings Top, Profit Drops On Lower Prices
Zacks Investment Research | Jul 12, 2016 07:31AM ET
Alcoa (NYSE:AA) posted forecast-topping earnings in the second quarter of 2016, but lower aluminum prices dragged down its sales and profits in the quarter.
The New York-based aluminum giant’s profits slipped on a reported basis in the quarter, hurt by lower metals prices and charges related to restructuring actions and business separation. Alcoa logged profit, as reported, of $135 million (or 9 cents per share) for the reported quarter, a roughly 4% decline from $140 million or 10 cents per share in the year-ago quarter.
Barring one-time items, earnings came in at 15 cents per share (down from 19 cents per share a year ago), comfortably beating the Zacks Consensus Estimate of 9 cents. Gains from productivity actions continued to offset headwinds from lower metal prices. The company recorded productivity gains of $375 million across all segments in the quarter.
Revenues went down roughly 10% year over year to $5,295 million in the second quarter as organic growth and gains from acquisitions was more than offset by lower prices of aluminum and alumina and divestment & closure of businesses. Revenues, however, beat the Zacks Consensus Estimate of $5,251 million.
Alcoa’s realized aluminum prices skid around 15% year over year in the reported quarter. Aluminum prices remain under pressure given the oversupply of the metal in the market. Nevertheless, prices ticked up 3% from first-quarter 2016.
Alcoa backed its global aluminum demand growth forecast for 2016. The company remains on track to complete its business separation in second-half 2016.
The company’s shares went up roughly 3.8% in extended trading yesterday on better-than-expected results.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.