Aluminum giant Alcoa reported its most profitable Q1 ever after the bell yesterday on higher metal demand from China and the global aerospace and construction industries. Net income rose 8.9% to $662 million ($0.75/share) from $608 million ($0.69). Sales were up 11% to $7.9 billion. Analysts were expecting EPS of $0.76 on revenue of $7.65 billion. Alcoa sold metal at an average $2,902 per metric ton in the quarter versus $2,534 a year earlier. World demand for aluminum is forecast to rise about 7.7% this year on rising consumption in Asia and Europe. Aluminum prices have risen 44% over the past two years while Alcoa shares have gained just 18%, fueling speculation that the company may be a takeover target -- possibly explaining the 13% rise in Alcoa shares over the quarter, the best performance of all the Dow Jones Industrials. Alcoa shares rose 2.4% in AH trading after the report.
Sources: Conference call transcripts: Q1 2007, Wall Street Journal, Mercury News, Bloomberg, MarketWatch
Commentary: Alcoa Earnings Preview: An Historic Look At Stock Activity • Blue-Chip Alternative Energy Picks
Stocks/ETFs to watch: Alcoa Inc. (NYSE:AA). Competitors: Alcan Inc. (NYSE:AL). ETFs: PowerShares FTSE RAFI Basic Materials (PRFM), Materials Select Sector SPDR (NYSEARCA:XLB), Vanguard Materials ETF (NYSEARCA:VAW)
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