NEW YORK, (Reuters) - Alcoa Inc. (AA), the world's largest aluminum producer, said Monday that second-quarter profit soared on higher metal prices and strong aerospace demand, although revenue fell below Wall Street expectations and the stock fell.
Net earnings were $744 million, or 85 cents per share, compared with $460 million, or 52 cents per share in the same quarter last year, the Pittsburgh-based company said.
Earnings from continuing operations were 86 cents per share. Analysts on average were expecting the company to earn 86 cents, according to Reuters Estimates.
The results included a charge of about 4 cents per share for costs associated with a new four-year labor agreement with workers belonging to the United Steelworkers union.
In its earnings release, Alcoa said revenue in the quarter rose to $7.96 billion from $6.70 billion a year earlier, but lower than analyst expectations of $8.14 billion.
In after-hours trading Alcoa stock fell to $32.61 from $33.41 on the New York Stock Exchange.
The company said results were driven by higher LME (London Metals Exchange) prices and strong market demand in aerospace, building and construction, as well as commercial vehicles and can sheet markets.
Aluminum started the quarter, in April at $2,520 per tonne and rose to hit a peak on May 11 of $3,185. It closed Monday at $2,570.
Last month, unionized workers ratified a new labor contract at Alcoa after the company made contingency plans for a strike. The 4-cent per share charge included payment of a signing bonus of $1,500 to each of the approximately 9,000 Alcoa workers whose acceptance of the pact averted a threatened strike at the world's largest aluminum producer.
With high aluminum prices translating into bigger potential profits for Alcoa, the last thing the company wanted was a crippling labor strike. In 1986, Alcoa management kept operations going during a six-week work stoppage.