Alcoa Profit Tops Estimate; Sales Fall Short

(RTTNews) - Alcoa, Inc. (AA), the largest U.S. aluminum producer, said Wednesday after the markets closed that it swung to a first quarter profit, as revenue increased due mainly to strong organic growth in automotive and aerospace.

The company's quarterly earnings per share, excluding items, also came in above analysts' expectations, but its quarterly sales fell short of analysts' forecast.

"First quarter results show our transformation is moving at ongoing high speed and is fully on course," said Klaus Kleinfeld, Alcoa Chairman and Chief Executive Officer.

Alcoa shares are currently losing 3.51% in after hours trading after closing the day's regular trading session at $13.67, up 24 cents or 1.79%. The shares trade in a 52-week range of $12.34 to $17.75.

Alcoa was replaced by Nike, Inc. (NKE) on the Dow Jones Industrial Average Index in 2013. However, it is s still among the first major U.S. companies to report earnings for a new season and is considered a bellwether.

Alcoa was among the companies that were hit most during the recession. The company cut more than 20,000 jobs and closed plants in the U.S. and Europe to tide over the global economic slowdown. Like other aluminum producers, the company had been suffering from declining aluminum prices caused by a glut. Alcoa has taken steps to cut costs and reallign production in order to remain competitive.

Alcoa last year acquired jet engine component maker Firth Rixson, which is expected to increase its revenues by $1.6 billion in 2016. Last month, Alcoa completed the acquisition of privately held TITAL, a Germany-based manufacturer of titanium and aluminum structural castings for aircraft engines and airframes. Also last month, Alcoa agreed to buy titanium supplier RTI International Metals, Inc. (RTI) for an enterprise value of $1.5 billion to strengthen its aerospace business.

Additionally, Alcoa is doubling its jet engine coating technology capacity at its Whitehall, Michigan, U.S. facility.

Alcoa sold three European rolling mills and completed closure of Australian can sheet rolling mills during the fourth quarter. Alcoa also continued to reduce costs in its upstream businesses. The company sold stakes in upstream assets during the fourth quarter.

Alcoa's Alumina segment reported an after-tax operating income, or ATOI, of $221 million for the first quarter, up from $92 million a year earlier. Alumina production totaled 3,933 kmt in the first quarter, down from 4,172 kmt in the first quarter of last year.

The company's Primary Metal segment reported a first quarter after-tax operating income of $187 million, compared to an after-tax operating loss of $15 million in the first quarter of 2014.

First quarter ATOI for the company's Global Rolled Products segment fell 42% from last year to $34 million, as market pressures in packaging and metal price lag more than offset record shipments in automotive.

Fourth quarter ATOI from the company's Engineered Products and Solutions segment grew 1% year-over-year to $191 million.

For the first quarter ended March 31, 2015, the company reported net income of $195 million or $0.14 per share, compared to a net loss of $178 million or $0.16 per share for the year-ago quarter.

Excluding special items, adjusted net income for the first quarter was $363 million or $0.28 per share, compared to $98 million or $0.09 per share in the prior year quarter.

On average, 18 analysts polled by Thomson Reuters expected the company to earn $0.26 per share for the first quarter. Analysts' estimates typically exclude special items.

Sales for the first quarter rose 7% to $5.82 billion from $5.45 billion in the same quarter last year. Fourteen analysts had a consensus revenue estimate of $5.94 billion for the first quarter.