Alcoa returns to profit as US results begin
ALUMINIUM miner Alcoa said it had returned to profit yesterday thanks to growing sales, and raised its estimate for global consumption of the metal.
The largest US aluminium producer, whose results are often viewed as a bellwether of the American economy, said it made a $136m (£91m) profit for the quarter, compared to a loss of $201m in the previous three months and a loss of $454m in the same period last year.
Revenue rose 22 per cent to $5.2bn, the Pittsburgh-based company said.
Chairman and chief executive Klaus Kleinfeld told analysts that strong industry fundamentals were expected to drive demand for aluminium in the next ten years with an average growth rate of six per cent per year.
“You see robust consumption growth in places like China, Brazil, India, modest increases in North America and Europe.
“There’s a lot of very positive indications there of a real recovery in almost all of these markets,” he said. “But I believe that the biggest risk is still the volatility that could potentially come from financial markets.”
Based on the improved demand, Kleinfeld said Alcoa was raising its projection for global aluminium consumption to 12 per cent this year.
The firm is the first in the Dow Jones index to post results, and is often seen as a taster of
earnings for the rest of the large-cap companies.
“It’s constructive and it helps start the earnings season off on a positive note,” said Brian Hicks of US Global Investors in Texas.
“From the standpoint of Alcoa, they see the economy continuing to expand. It’s robust enough that they have to increase their forecast for global aluminium production.”