Alcoa beats estimates, stabilizing aluminum prices continue to help results


Alcoa (AA) +1.4% AH after Q2 earnings and revenues beat expectations, driven by strength in its engineered products and primary metals businesses.

AA's primary metals business, which makes raw aluminum, posted a Q2 operating profit of $97M vs. a $32M in the year-ago period; average realized aluminum prices rose 2.4%.

Q2 operating income in AA's engineered products segment, which makes products including small parts such as screws and bolts, rose 5.7% Y/Y to $204M amid higher volumes across all businesses.

AA raises its 2014 estimate for the North America commercial transportation market to 10%-14% vs. a previous range of 5%-9%, driven in part on rising truck orders and backlogs.

Reaffirms its 2014 global aluminum demand growth forecast of 7%; sees a global aluminum deficit of 930K metric tons, an increase from a deficit of 730K metric tons estimated in Q1, and sees a tightening of the alumina market with a surplus declining from 2.257M metric tons in Q1 to 824K metric tons in Q2.

Continues to project 2014 global aerospace growth of 8%-9%, driven by strong demand for both large commercial aircraft and regional jets.

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Comments (9)
  • taplinger
    , contributor
    Comments (347) | Send Message
     
    A lot of knowledgeable people had very good reasons why AA wouldn't get passed 13 and was poised to fall back to 10. One thing that never works well is fighting the market. There's going to be a lot of smiles on the investors who are long AA.
    8 Jul 2014, 05:21 PM Reply Like
  • Joe Lunchbox
    , contributor
    Comments (711) | Send Message
     
    Yep, I'm smiling! :D

     

    I just hope some of that good news can rub off on the rest of the market tomorrow!
    8 Jul 2014, 05:29 PM Reply Like
  • newnnly
    , contributor
    Comments (391) | Send Message
     
    all smiles here. Long AA. Hoping the rest of earnings are good.
    8 Jul 2014, 05:39 PM Reply Like
  • flyerguy1300
    , contributor
    Comments (1108) | Send Message
     
    Smiling here too! Long AA!!
    8 Jul 2014, 07:12 PM Reply Like
  • Gumby
    , contributor
    Comments (3657) | Send Message
     
    We have too much aluminium already and too much carbon in the atmosphere, too. you happy ? Can we stick aluminium below $1 a pound forever? Dont count on it. A lot of industrial users will bet hurt at the bottom lines as aluminium prices will double soon. Live and learn!
    8 Jul 2014, 06:42 PM Reply Like
  • manfredthree
    , contributor
    Comments (3155) | Send Message
     
    When you buy a nice cold can of pop for $1.25 say, only a few pennies goes for that nice aluminum can (fully recyclable) that makes it all possible. In many jurisdictions, state and local taxes dwarf the can cost. so aluminum at $1. instead of $.80 might be a penny in the cost. The fact is that aluminum is a very high-tech material in its modern applications. Its also very environmentally friendly, considering the almost perpetual recyclability. No reasonable person would pursue (for long) the argument that such a material should not fetch its cost of production. But the reality is that for the last several years we've seen very narrowly focussed special interest groups try to argue that any increase in the cost of aluminum would hurt mankind. Well, fortunately, they are just special interest groups.
    8 Jul 2014, 07:51 PM Reply Like
  • RS055
    , contributor
    Comments (5671) | Send Message
     
    yes its better to be always upbeat and bullish and fully invested. Look at it this way - you feel good day after day for a couple, three years ( that's a lot of days). You feel secure and in tune with your neighbors and the world. You feel healthy and all the hormones will be kicking in - the good ones like endorphins etc.
    Once in a long while you get these darned crashes and they wipe out all your gains over the preceding five years . So , OK , you feel bad for a day , maybe a week. You get flooded with cortisol. Nothing that a bottle of good single malt cant fix. Best part, you will have lots and lots of company.
    But if you sum up all the good feelin' days with the few bad feelin' days , you come out way ahead on the feelin's count anyway.
    8 Jul 2014, 07:33 PM Reply Like
  • manfredthree
    , contributor
    Comments (3155) | Send Message
     
    The forces that took AA from $6 to $15 appear to remain fully in force. Our response will be to add.
    8 Jul 2014, 07:54 PM Reply Like
  • truckie45
    , contributor
    Comments (10) | Send Message
     
    love aa and long here. a well ran company. all the doomsayers go take a break ok?
    8 Jul 2014, 07:56 PM Reply Like
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