Alcoa Inc.’s share price up, beats analysts’ forecasts by posting a 138-million-dollar profit during Q2

The U.S.-based aluminium manufacturer Alcoa Inc. made an official statement revealing that its profit over the second fiscal quarter was better than expected due to the stability of the companys traditional aluminium smelting business.

According to the statement of Alcoa Inc., the second-quarter profit excluding restructuring costs and other one-time items amounted to 18 cents a share, surpassing the median analysts forecast of 12 cents apiece. Alcoa Inc. also posted a 5.84-billion-dollar sales over the second quarter of the year, that also beat the median analysts estimate of 5.65 billion dollars.

The company reported profit that amounted to 138 million dollars in comparison to the 119-million-dollar loss it posted over the second quarter of the previous fiscal year.

The Chief Executive Officer of Alcoa – Mr. Klaus Kleinfeld – explained that the encouraging results of the company over the period were due to the companys efforts to consolidate its positions as a supplier of lightweight material to different industries, including automotive and aerospace. Mr. Kleinfeld also shared that the company benefited from the cost reduction strategy, whose goal is to improve the productions profitability of the company.

The core metals business of Alcoa Inc., which has been experiencing some problems when it comes to earnings, now showed an after-tax operating income estimated at 97 million dollars over the latest quarter. In comparison, it posted a 32-million-dollar loss over the same period a year ago.

One of the analysts, who work at Morningstar Inc. – Mr. Andrew Lane commented on Alcoa Inc.s second-quarter performance for the Wall Street Journal: “The smelting business came back in a big way.” Mr. Lane said: “Theyve been very aggressive” when it comes to cutting expenses and capacity in that commodity metals business. As reported by Bloomberg, the analysts also commented: “There’s much more growth potential for the primary business than for the global rolled business even though management spends a lot more time talking about the global rolled business.”

Alcoa Inc. was 0.75% up to close at 14.85 dollars per share yesterday, marking a one-year change of +87.74%. According to the information published on the Financial Times, the 16 analysts offering 12-month price forecasts for Alcoa Inc. have a median target of 15.00, with a high estimate of 18.00 and a low estimate of 8.00. The median estimate represents a increase from the last price of 14.85.