Alcoa Earnings Drop Sharply on Weaker Dollar, but Revenues Rise
For the third quarter ended Sept. 30, Alcoa said net income fell to $61 million, or 6 cents a share, down from $77 million, or 8 cents, in the year-ago period. That matched analysts' average estimate, according to data from Thomson Reuters.
The Dow component said revenue increased 15% to $5.3 billion from $4.6 billion in last year's third quarter. Analysts were looking for revenue to come in at $4.95 billion.
Strength Seen Through Year-End
Lower prices for metals and negative currency effects were partially offset by higher volumes in alumina, flat-rolled products and engineered products, Alcoa said in a media release.
"We enhanced our liquidity, improved our balance sheet, and saw strong performance in our mid- and downstream businesses," said Klaus Kleinfeld, Alcoa chairman and chief executive. "And despite unfavorable currency shifts and slightly lower metal prices, our upstream businesses continue to make progress."
Alcoa said demand appears to be picking up into the end of the year. "We see markets strengthening and have increased our 2010 global aluminum consumption forecast to 13% from 12%, CEO Kleinfeld said. "In countries such as China, Brazil, India and Russia, more and more people are moving into the middle class, driving demand in building and construction, transportation, and packaging."
Shares in Alcoa rose sharply in after-hours trading. The stock is down nearly 25% year-to-date, underperforming the broader market by a wide margin. See the chart below.