Alcoa's 1Q Profit Rises, Beats Expectations
NEW YORK (AP) â¿¿ Alcoa Inc. kicked off earnings season Monday by reporting a larger first-quarter profit than analysts expected, helped by strong demand for aluminum used to make airplanes and automobiles.
The company still sees demand for aluminum growing 7 percent in 2013, with gains cutting across many industries.
Alcoa is the first company in the Dow Jones industrial average to report first-quarter results. Because its products wind up in so many things, from cars and buildings to soda cans, investors study Alcoa's results for hints about earnings at companies in other industries.
Alcoa said net income in the first quarter was $149 million, or 13 cents per share, compared with $94 million, or 9 cents per share, a year earlier.Excluding special items, the company said it would have earned 11 cents per share, beating analysts' forecast of 8 cents per share, according to FactSet. Revenue fell to $5.83 billion from $6.01 billion a year earlier and was below the $5.91 billion that analysts predicted. Alcoa blamed lower aluminum prices and curtailed production in its European primary metals business. Over the past decade, Alcoa has shifted more of its business away from mining and refining and into the production of parts for industry. The company is benefiting as airplanes and autos get lighter for better fuel efficiency by using more aluminum parts. Airlines have been ordering new planes to reduce their spending on fuel, the largest cost for many of them. That trend should continue for several years, making aerospace a growing aluminum market, chairman and CEO Klaus Kleinfeld said in a conference call with analysts. U.S. auto sales are booming, too, as customers who put off purchases during the recession trade in their aging vehicles. In March, sales hit 1.45 million vehicles, the highest total since August 2007, according to Autodata Corp.
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