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Last Update: 12-Oct-11 09:16 ET
Alcoa's Third Quarter Earnings Results Fall Short of Expectations
Alcoa (AA $10.30) reported third quarter earnings of $0.15 per share, or $172 mln, including items, may not be comparable to the Capital IQ Consensus Estimate of $0.23, special items included the positive impact of mark-to-market changes on certain energy contracts and a net discrete income tax benefit, partially offset by the negative impact of net costs associated with restructuring and uninsured losses, including losses related to flood damage at Alcoa's Bloomsburg, PA, plant; adjusted earnings were $164 mln.
Revenues rose 21.4% year/year to $6.42 bln vs the $6.24 bln consensus.
Looking forward, Alcoa continues to project aluminum demand will grow 12% in 2011 on top of the 13 percent growth seen in 2010. Increasing demand in China, where the co has raised its 2011 growth projection two-percentage points to 17%, will mostly offset declines in Europe and other regions.
Growing demand for aluminum beverage cans in China, Europe, and the Middle East will offset flat to declining markets in the United States and drive overall packaging market growth of 2 to 3 percent in 2011 compared to 2010. The recovery in the industrial gas turbine market continues to support a brighter long-term outlook and a 2011 growth projection of 5 to 10 percent. The building and construction market continues to struggle in North America and Europe, leading to a growth projection of 1 to 3 percent, primarily due to continued strength in non-residential construction in China.
The outlook for commercial transportation is mixed, with a weaker second half of 2011, driven primarily by lower sales in Europe and China, offsetting strong first-half results and continued gains in the North American market. Alcoa projects heavy truck and trailer sales will range from flat to 2 percent growth over 2010.
Revenues rose 21.4% year/year to $6.42 bln vs the $6.24 bln consensus.
Looking forward, Alcoa continues to project aluminum demand will grow 12% in 2011 on top of the 13 percent growth seen in 2010. Increasing demand in China, where the co has raised its 2011 growth projection two-percentage points to 17%, will mostly offset declines in Europe and other regions.
Growing demand for aluminum beverage cans in China, Europe, and the Middle East will offset flat to declining markets in the United States and drive overall packaging market growth of 2 to 3 percent in 2011 compared to 2010. The recovery in the industrial gas turbine market continues to support a brighter long-term outlook and a 2011 growth projection of 5 to 10 percent. The building and construction market continues to struggle in North America and Europe, leading to a growth projection of 1 to 3 percent, primarily due to continued strength in non-residential construction in China.
The outlook for commercial transportation is mixed, with a weaker second half of 2011, driven primarily by lower sales in Europe and China, offsetting strong first-half results and continued gains in the North American market. Alcoa projects heavy truck and trailer sales will range from flat to 2 percent growth over 2010.
