Alcoa Gains Even After Forecasting Weak Demand in 2019

The company says it expects shipments across its business to be flat this year.

Author:: Tony Owusu
Publish date:: Jan 18, 2019 4:44 PM EST

iStock

Pittsburgh-based industrial Alcoa Corp. (AA) - Get Report rose 2.1% to $29.59 at the close of trading on Thursday following the company's fourth-quarter earnings release and disappointing guidance.

The company swung to a profit of $43 million, or 66 cents a share on an adjusted basis, after reporting a loss in the same quarter last year. The company saw revenue rise 5% to $3.34 billion.

Analysts were expecting the company to report a profit of 50 cents a share on revenue of $3.33 billion.

Alcoa forecast that its supply would outpace demand this year and that shipments across its business would be flat. The company's aluminum business is expected to see its shipments fall to between 2.8 million and 2.9 million metric tons, down from 3.3 million tons shipped in 2018.

Alcoa expects that the aluminum industry will have a surplus of alumina, the raw material it uses to make aluminum, of as much as 1 million metric tons in the coming year.

The company did say that it expects lower alumina-related costs in its aluminum segment in the first quarter, but those benefits will be offset by higher maintenance costs.