Alcoa Inc. said on Tuesday its third-quarter profit almost doubled, but results fell below Wall Street forecasts due to lower aluminum prices and weakness in the automotive and home-building sectors.
The world’s largest aluminum producer warned in July the recent surge in aluminum prices would abate somewhat in the third quarter from a mid-May peak as demand was affected by seasonal weakness. But even so, the results surprised Wall Street, which had been looking for a higher profit.
“They didn’t do well and they cannot blame it as much on energy prices as on commodity prices falling in the quarter,” said Andrew Seibert, a senior portfolio manager at S&T Wealth Management based in Pittsburgh. “They missed by quite a bit.”
Net earnings were $537 million, or 61 cents per share, compared with $289 million, or 33 cents per share in the same quarter last year, the Pittsburgh-based company said.
Revenue rose 19 percent to $7.63 billion. Aluminum prices, although higher than last year, were 6 percent lower than the previous quarter.
Analysts on average were expecting 77 cents per share and revenue of $7.68 billion, according to Reuters Estimates.
“At first glance, it does not look terribly good,” said Charles Bradford of Bradford Research/Soleil. “It’s still up from a year ago, but it’s a lot less than I would have thought it should have been.”
In a statement, Chief Executive Officer Alain Belda noted Alcoa had said the third quarter would be solid, but would reflect the traditional seasonal slow-down and lower metal prices.
“While the North American automotive and the housing construction markets are softening, most of our downstream markets continue to be strong — especially aerospace and commercial transportation,” he added.
