|
Alcoa posts healthy 2Q gains
|
 |
July 7, 1998: 1:55 p.m. ET
Aluminum company beats Street estimates by 9 cents per share
|
NEW YORK (CNNfn) - Aluminum Company of America, the world's leading producer of aluminum, is giving investors something to smile about.
The Pittsburgh, Pa.-based company Tuesday posted net income for the second quarter, ended June 30, of $207 million, or $1.24 per share, up from $207.6 million, or $1.19 per share, a year ago.
Analysts polled by First Call had expected Alcoa's earnings to come in at about $1.15 per share.
Before after-tax losses of $21.1 million, or 13 cents per share, Alcoa's earnings were closer to $228 million. The loss is related to the expense of marking to market certain aluminum commodity contracts.
"Alcoa's sales growth I think largely reflected its [February] acquisition of Inespal, a Spanish national aluminum company, which helped their volume," said S&P Equity Group analyst Leo Larkin. "But the stronger quarter also was really driven by lower costs than anything else. They have lowered their research and development costs and their selling and general administrative (SGA) expenses."
Larkin noted that Alcoa is performing well in an otherwise adversarial market, where aluminum prices remain soft.
Earnings per diluted share during the quarter rose to $1.24 from $1.18 a year ago.
Revenue rose to $3.61 billion from $3.47 billion.
"We are very pleased with our earnings performance for the first half of the year, since we have been able to more than offset a 16 percent drop in aluminum prices on the (London Metals Exchange) since the beginning of 1998," Alcoa Chairman and Chief Executive Paul O'Neill said. "We look forward to the addition of Alumax in the next quarter and have been hard at work with Alumax employees to make the acquisition very beneficial to Alcoa customers and shareholders."
In June, the U.S. Justice Department gave Alcoa the green light to proceed with its $3.8 billion acquisition of Atlanta-based Alumax - the nation's third-largest producer of aluminum. Under the deal, Alcoa agreed to divest its dominant cast-plate operations.
Shares of Alcoa (AA) were trading up 3-1/2 at 89-5/8 on the New York Stock Exchange Monday afternoon following the earnings report. Click here to track the activity of Alcoa's stock
Since October, the company's stock has fallen from a high of nearly $90 per share.
Analysts, however, say the company's weakening stock price is at least partially attributed to its acquisition of Alumax and the resulting number of new shares issued that have weighed down stock prices. 
|
|
|
|
|
|
Alcoa
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
