Alcoa Inc (AA) officially kicked off another earnings season on Monday with mixed second-quarter results.
Revenue came in better than expected, but earnings per share were short for the first time in five quarters.
The company reported adjusted earnings per share of 32 cents, missing the Zacks Consensus Estimate of 34 cents. Earnings estimates had been falling heading into the number, and the stock was downgraded to a Zacks #4 Rank (Sell) on July 7.
Revenue for the quarter rose 27% to $6.585 billion, above the Zacks Consensus Estimate of $6.434 billion. The increase was due in part to higher alumina shipments, and higher realized pricing for both alumina and aluminum.
Revenue growth was strong in many of Alcoa’s end markets. Commerical transportation rose 13% while packaging increased 13%. Building and construction was up a solid 12% while industrial products increased 9%. Aerospace saw a 6% rise in revenue.
Meanwhile, the gross profit margin expanded year-over-year from 18.8% of revenue to 20.3%. It fell, however, from 20.9% in the first quarter.
CEO Klaus Kleinfeld remained positive on the company’s outlook, stating that “[d]emand for aluminum continues to rise and so does growth in our major markets. These factors support our projection that aluminum demand will grow 12 percent this year and will double by 2020.”
Alcoa Inc. is the world’s leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, and is active in all major aspects of the industry.
Shares are up slightly in after hours trading.
We’ll have a more in-depth look at Alcoa’s quarterly report coming up…
Todd Bunton is the Growth & Income Stock Strategist for Zacks.com.
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