Profit Rises at Alcoa

Updated from July 7

Second-quarter earnings rose at Alcoa ( AA) as sales increased 11% on higher realized prices across all segments, combined with seasonal improvements in the packaging and home-building markets.

The aluminum producer said after the bell Wednesday that net income rose to $404 million, or 46 cents a share, from $355 million, or 40 cents a share, in the previous quarter.

The results missed the Thomson First Call consensus estimate by a penny and shares were down 77 cents, or 2.3%, to $32 in premarket trading Thursday.

Revenue rose to $6.11 billion, just above the analysts' estimate of $6.08 billion.

Alcoa said fabricated aluminum shipments continued to show strength as demand in the commercial vehicle, building and construction, and aerospace markets improved. Growth in North American markets accounted for most of the improvement in sales, while Europe was relatively flat and Asia remained strong.

The company said five of six segments showed double-digit increases in profitability year-over-year; alumina & chemicals was up 79%, and Engineered Products increased 70%.

Results for the current quarter included charges for environmental work at New York's Grasse River, certain restructuring charges, and benefits from the restructuring of debt. The net benefit surrounding these activities was immaterial to the company's results.

"By keeping our focus on controlling costs and seizing opportunities for growth, we achieved our most profitable first half performance ever," said Alain Belda, Chairman and CEO. "Looking forward, we see continued favorable fundamentals in upstream businesses and significant potential in downstream aerospace, industrial products, and commercial vehicle markets that are moving off lows in the cycle."

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