Alcoa shines a hopeful light on the economy
The aluminum maker's strong results -- and its forecast for good growth ahead -- should hearten bulls.
New York-based Alcoa has its fingers in many different pies, such as aerospace, automotive, packaging and construction, which makes it a good proxy for the overall economy. And the company continues to expect that global demand for aluminum will grow 7% in 2013, helped by a 9%-10% increase in aerospace and a single-digit rise across the rest of the sectors it serves.
Even better news for Alcoa is its forecast that its surplus will decline to 155,000 metric tons in the quarter, down from 535,000 metric tons in the fourth quarter. That should help firm up aluminum prices, which of course will benefit Alcoa's bottom line. Prices for the metal on the London Metal Exchange have fallen 9.2% this year. My colleague Charley Blaine took a closer look at Alcoa's numbers yesterday.
Analysts are expecting aluminum demand from the automotive and aerospace sectors to remain robust. A likely rise in commercial construction will also help.
Alcoa reported net income in the last quarter of $149 million, or 13 cents a share, versus $94 million, or 9 cents, a year earlier. Excluding one-time items, profit was 11 cents, surpassing the 8-cent average estimate of analysts surveyed by Bloomberg. Revenue slipped 2.9% to $5.83 billion because of fewer production days. That lagged analysts' estimates of $5.88 billion.
"It's a solid, good quarter," said Alcoa CEO Klaus Kleinfeld, in an interview with CNBC.
Wall Street expects the good times to continue for Alcoa. The average 52-week price target on the stock is $9.73, about 16% above where it currently trades.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
More Market News
These hot movers could rise by double digits in coming months.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'