Alcoa beats 2Q forecast
|
|
July 6, 2001: 12:28 p.m. ET
Leading aluminum maker's operating profit rises; power sales helpful
|
NEW YORK (CNNfn) - Aluminum maker Alcoa Inc. beat Wall Street expectations Friday for its second quarter, posting improved profit from operations instead of the forecast decline.
The world's largest aluminum maker – the first of the 30 companies in the Dow Jones industrial average to report results – earned $429 million, or 49 cents a diluted share, in the quarter excluding special items. Analysts surveyed by earnings tracker First Call had forecast earnings to slip to 45 cents a share from 47 cents a year earlier.
Including special items, which covered facility closure and other employment cut costs, the company had net income of $315 million, or 36 cents a share, in the latest quarter.
Sales rose to $5.99 billion from $5.57 billion a year earlier as Alcoa sold some of its contracted electricity – which normally would have been used to run the plants – back to the power market.
Pittsburgh-based Alcoa (AA: down $0.05 to $40.73, Research, Estimates) noted the revenue from sale of power again overcame the lost revenue from production cuts in the Pacific Northwest.
"Alcoa's earnings appears to resemble a biblical scripture because it can be interpreted in many ways," said Sanford Bernstein analyst John Tumazos. After taking out special sale and tax gains, Tumazos said the company earned 43 cents a share, roughly as he expected.
The aluminum maker will have a hard time growing earnings, analysts said. Capacity in the U.S. Northwest should be off-line for at least the next nine months, according to industry-watchers, while aluminum companies are also expected to struggle with sluggish demand and soft commodity prices.
Alcoa said it received lower prices for aluminum and cited weak demand from auto and truck trailer makers as well as other industrial users.
Click here for look at metals stocks
In spite of tough economic conditions, shares of Alcoa still rose 9.5 percent in the quarter, outperforming the Standard & Poor's 500 index, which rose about 5.5 percent. The earnings report had little effect on Alcoa shares which dropped marginally in early afternoon trading Friday.
Copyright 2001 Reuters All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
|
|
|
|
Alcoa
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
|
|