Alcoa tops 1Q earnings expectations, misses revenue forecasts
DALLAS (AP) -- Alcoa Inc. posted a first-quarter profit that beat Wall Street expectations but its revenue fell short as it continues to transform itself into a supplier for the auto and aerospace industries.
Alcoa was helped by aluminum prices that were 10 percent higher than a year ago, although down from the fourth quarter of 2014. It said growth was mostly driven by its autos and aerospace business.
The company repeated its forecast of increased demand in 2015 from key industries, which also include construction and packaging.
The New York-based company said that net income was $195 million, compared with a loss of $178 million a year earlier. Excluding restructuring charges, Alcoa said it would have earned 28 cents per share, up from 9 cents per share a year earlier. Analysts had predicted 26 cents per share, according to a FactSet survey.
Revenue rose 7 percent to $5.82 billion, but that was below the $5.94 billion that analysts predicted.
CEO Klaus Kleinfeld said that revenue was reduced by the company's moves to close, sell or curtail some of its mining and smelting operations in several countries. Those who failed to understand that, he said, "missed out the first two years in elementary school."
"The revenues that were lost were lost for a good reason," Kleinfeld said in an interview. "Those facilities have not been great performers. Sometimes lower revenue is better for the shareholders - much better."
Kleinfeld's strategy is to transform Alcoa from a producer of aluminum, a commodity, to a high-tech maker of aluminum and titanium parts for cars and planes. He insisted that the first-quarter results showed that the transformation is still working.
The company has backed up that strategy with recent acquisitions including Firth Rixson, which makes jet engine components, and Tital, a maker of titanium castings, and the pending purchase of RTI International Metals, which makes titanium products for aerospace.
Alcoa shares were down 46 cents, or 3.4 percent, to $13.21 in extended trading late Wednesday. In the session that closed before results were released, the shares rose 24 cents to close at $13.67.
The shares have dropped 13 percent since the beginning of the year, while the Standard & Poor's 500 index has risen 1 percent.
Keywords: Alcoa, Earnings Report