Aluminum manufacturing giant and Dow Component, Alcoa Inc (NYSE: AA) announced better-than-expected fiscal third quarter results on Tuesday thanks to improving productivity at its primary metals and engineeringÂ products divisions.
For the quarter third quarter, the company reported net loss of $143 million, or 13 cents a share, against a net income of $172 million, or 15 cents, in the year earlier quarter. After excluding onetime expenses such as environmental remediation costs, earnings per share came at 3 cents. Analystsâ€™ consensual estimate was for brake-even earnings a share (after excluding onetime charges).
Sales contracted to $5.83 billion from $6.42 billion in the corresponding period of the last year, beating analystsâ€™ consensual forecast of $5.56 billion.
The Ney York based Company, whose results are often regarded as economic bellwether has been reeling under pressure in the recent past owing to slowdown in global manufacturing activities.
Now in order to overcome the challenge of declining raw aluminum prices and boost shareholderâ€™s value, Alcoaâ€™s Chief Executive Klaus Kleinfeld is trying to increase sales by focusing more on high-value products such as automotive components, bolts and screws used in the aircrafts. In August, spot aluminum slumped to a 34 month low amid rising global macroeconomic uncertainty.
Commenting over the results, John Stephenson, who manages $2.7 billion including Alcoa shares atÂ First Asset Investment ManagementÂ Inc. in Toronto, said in an interview to Bloomberg â€śAlcoaâ€™s done a better job than I would have thought given the fairly negative backdrop over the last year.â€ť
â€śEngineered products, their value-added products divisions, those are the brightÂ lights,â€ť added Stephenson.
Meanwhile, Mr. Kleinfeld also reaffirmed his long-term outlook for the aluminum components. According to the Chief Executive the demand for aluminum components is likely to double between 2010 and 2020.
“Markets seem to be driven more by headlines than fundamentals right now, but Alcoa remains focused on the things within our control..Â We’re capitalizing on pockets of strong growth and achieving record profitability in our mid and downstream businesses,â€ť said Mr. Kleinfeld while addressing to analysts in a conference call.
Shares closed at $9.13 during regular trading hours on Tuesday. The 52 week trading range is $7.97-$11.66.