Alcoa expected to post flat 2Q profit
NEW YORK (AP) — Alcoa Inc. unofficially opens another earnings season Monday when it reports second-quarter results after the markets close.
Alcoa makes aluminum products used in many consumer goods, making it an economic bellwether. Its place in line as the first member of the Dow Jones industrial average to report results adds to interest in the company's results. Analysts parse the results for hints about other companies that will report earnings later.
Analysts expect Alcoa to report second-quarter earnings per share excluding items such as the cost of closing smelters to be steady and revenue to be lower than a year ago.
A tepid global economy and oversupply have weakened prices for aluminum and weighed on Alcoa's results. The company has been helped by stronger demand for aluminum in cars and planes, however.
Aluminum prices fell about 10 percent from the start of the quarter in April to the end of June. The company has responded by pulling down capacity.
In May, Alcoa announced that it was reviewing facilities that accounted for 460,000 metric tons of smelting capacity, or about 11 percent of the company's total. Since then, Alcoa has announced that it will close two lines at a smelter in Canada and shut down an idled smelter in Italy, reducing capacity by nearly 150,000 tons.
Demand has been strong in the automobile and airplane manufacturing sectors, however. Auto sales from January through June exceeded 7.8 million vehicles, the car industry's best first half since 2007, according to firms that track the sales. Boeing and Airbus are increasing production to handle huge backlogs of orders from airlines that want new, more fuel-efficient planes.
Analysts expect Alcoa to report earnings of 6 cents per share, excluding items such as restructuring costs. Revenue is expected to be $5.85 billion, according to a survey by FactSet.
A year ago, Alcoa posted a loss of $2 million, or break-even per share. It would have earned 6 cents per share excluding special items. Revenue was $5.96 billion.