NEW YORK – Alcoa Inc. (AA), the world's largest aluminum producer, Wednesday announced sharply increased earnings but the results fell short of Wall Street expectations, sending the company's stock lower in after-hours trade.
The Pittsburgh-based company, the first Dow component to report second-quarter earnings, said net income was $404 million, or 46 cents per share, compared with $216 million, or 26 cents, a year ago.
Revenue climbed 11 percent to $6.1 billion over the same quarter of 2003 on strong sales of alumina — the raw material for aluminum — and chemicals. Consumption of aluminum, used in everything from cars to construction to cans, has increased while inventories have declined, sending prices higher.
However, the consensus of analysts polled by Reuters Estimates had expected Alcoa to earn 48 cents per share, with a range of 44 cents to 52 cents. In after-hours trading, Alcoa stock fell to $31.65 from its close of $32.77 on the New York Stock Exchange (search).
"We see continued favorable fundamentals in upstream businesses and significant potential in downstream aerospace, industrial products, and commercial vehicle markets that are moving off lows in the cycle," Chairman and Chief Executive Officer Alain Belda said.
The London Metal Exchange's (search) benchmark aluminum contract for three-months delivery peaked in April at $1,845 per tonne, a high dating back to 1995 and up significantly from the year-ago low at $1,322.
Alcoa April 22 said it expected continued high prices for aluminum in the second quarter and seasonal gains for its packaging and consumer products and residential building and construction business.